Co-founder Shawn Colo named interim chief of digital media and advertising firm
Digital media and advertising firm Demand Media said CEO Richard Rosenblatt has resigned effective Oct. 31, with co-founder Shawn Colo named as interim chief.
Santa Monica, Calif.-based Demand Media also said James Quandt has been appointed chairman replacing Rosenblatt, effective immediately. The company’s board will begin a search for a permanent CEO shortly.
The company didn’t provide a specific reason for Rosenblatt’s resignation, but “the change is not entirely surprising given the pressure from Google’s algo(rithm) changes on the content business, the overall strategic drift in the company and waning share price,” Stifel analysts Jordan Rohan and Michael Purcell wrote in a note following the announcement.
Demand Media’s board also confirmed its spinoff plans, which were disclosed in February 2013, although the company said it is evaluating the timing for completing the separation. Under that plan, Demand Media would separate into two entities: one comprising its media assets and the other with its domain services business.
The company’s owned-and-operated websites include eHow.com, Livestrong.com and Cracked.com.
In June, Demand Media lowered revenue expectations for its second quarter to $100 million to $101 million — down from its previous estimate between $105 million and $107 million — citing a reduction in search engine referral traffic to owned-and-operated sites in May and June 2013.