Enom 2010 Annual Report Download - page 103

Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except per share amounts)
1. Company Background and Overview
Demand Media, Inc., together with its consolidated subsidiaries (the "Company") is a Delaware corporation headquartered in Santa Monica, California.
The Company's business is focused on an Internet-based model for the professional creation of content at scale, and is comprised of two distinct and
complementary service offerings, Content & Media and Registrar.
Content & Media
The Company's Content & Media service offering is engaged in creating long-lived media content, primarily consisting of text articles and videos, and
delivering it along with its social media and monetization tools to the Company's owned and operated and network of customer websites. Content & Media
services are delivered through the Company's Content & Media platform, which includes its content creation studio, social media applications and a system of
monetization tools designed to match content with advertisements in a manner that is optimized for revenue yield and end-user experience.
Registrar
The Company's Registrar service offering provides domain name registration and related value added service subscriptions to third parties through its
wholly owned subsidiary, eNom.
Initial Public Offering
In January 2011, the Company completed its initial public offering whereby it received proceeds, net of underwriters discounts but before deducting
offering expenses, of $81,817 from the issuance of 5,175 shares of common stock. As a result of the initial public offering, all shares of the Company's
convertible preferred stock converted into 61,672 shares of common stock and warrants to purchase common stock or convertible preferred stock net
exercised into 483 shares of common stock.
Reverse Stock-Split
In October 2010, the Company's stockholders approved a 1-for-2 reverse stock split of its outstanding common stock, and a proportional adjustment to
the existing conversion ratios for each series of preferred stock which was effected in January 2011. Accordingly, all share and per share amounts for all
periods presented in these consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse split
and adjustment of the preferred stock conversion ratio.
2. Summary of Significant Accounting Policies
A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows.
Principles of Consolidation
The consolidated financial statements include the accounts of Demand Media, Inc. and its wholly owned subsidiaries. Acquisitions are included in the
Company's consolidated financial statements from the date of the acquisition. The Company's purchase accounting resulted in all assets and liabilities of
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