Thursday, December 23, 2010

Report: Demand Media Sorting Out Accounting Before IPO

A report today says that the latest updates to Demand Media's S-1 are a result of government scrutiny over how the firm is accounting for content developed for its sites. According to AllThingsD, Demand has been discussing how it accounts for content developed for the site with government regulators, over issues of how best to amortize those expenses. Currently, Demand amortizes those expenses over five years, and apparently other publishing firms typically amortize those expenses over much less time. Demand Media has a somewhat unique model in that the firm pays content creators based on the amount of traffic to individual articles and web pages developed by those writers. AllThingsD said the accounting questions have delayed Demand Media's roadshow until the beginning of the year.