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Demand Media Lays Off 15 in Wake of CEO Exit (Exclusive)

Chief innovation officer Byron Reese ousted at Santa Monica-based "content farm"

The resignation of chairman/CEO Richard Rosenblatt was just the beginning of turnover at Demand Media.

Just days after Rosenblatt, who was one of the founders of the Santa Monica-based digital-media company announced he was stepping down, all 15 members of the research and development unit at the company were laid off, including chief innovation officer Byron Reese, according to sources.

Demand reps did not respond to repeated requests for comment.

The layoffs are just the latest troubling sign out of turbulence at Demand, which in just a few short years went from the darling of media circles for its low-cost approach to SEO-centric content production to a cautionary tale reduced to barely one-quarter of a market capitalization once valued near $2 billion.

Reese was seen as the architect of Demand’s SEO approach, which has been widely derided as turning the company into a “content farm” that flooded search engines with low-quality content. Google’s move to update its search algorithms in 2011 depressed Demand-generated content, a crushing blow to the company, which has tried to diversify into other businesses in the ensuing years.

Reese was the founder of PageWise, a company Rosenblatt acquired in 2007 that provided the basis for Demand’s SEO-centric strategies. He is a widely published futurist who has been featured in TED Talks and released a book earlier this year, “Infinite Progress: How Technology Will End Ignorance, Disease, Hunger, Poverty, and War.”

A bio page for Reese on Demand’s site has been removed, and he lists Demand as a previous employer on his LinkedIn page.

Most of the laid off employees, who were all in Reese’s unit, were based in Demand’s Austin, Tex., offices. Demand has approximately 700 employees.

Another of the company’s founders, Shawn Colo, was named interim CEO while its board searches for a replacement for Rosenblatt.

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