UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 13, 2014

 


 

DEMAND MEDIA, INC.

(Exact name of Registrant as specified in its charter)

 


 

Delaware

 

001-35048

 

20-4731239

(State or other jurisdiction

of incorporation)

 

(Commission File No.)

 

(I.R.S. Employer

Identification No.)

 

1655 26th Street
Santa Monica,
California

 

90404

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (310) 394-6400

 

Not Applicable

(Former name or former address if changed since last report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 7.01                                                                                           Regulation FD Disclosure.

 

On January 13, 2014, Demand Media, Inc. (the “Company”) posted an investor presentation containing information about Rightside Group, Ltd. (“Rightside”), a wholly owned subsidiary of the Company that will become a stand-alone public company pursuant to the Company’s planned separation of its domain name services business from its content and media business, as discussed in further detail below.  The investor presentation can be accessed on the investor relations page of the Company’s website at ir.demandmedia.com. The information in the investor presentation shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933.

 

Item 8.01                                                                                           Other Events.

 

On January 13, 2014, the Company issued a press release announcing the filing of a Registration Statement on Form 10 (the “Form 10”) with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Company’s planned separation of its domain name services business from its content and media business.  The Form 10 was filed by Rightside, a wholly owned subsidiary of the Company that was established in connection with the separation.

 

Following the separation, the Company will continue to operate its content and media business, while Rightside will become the holding company for the Company’s existing domain name services business. The domain name services business includes wholesale and retail ICANN-accredited registrars, an ICANN approved registry that will operate a portfolio of generic Top Level Domains and aftermarket services for premium domain names.

 

The Form 10 contains a preliminary information statement that includes important information about Rightside and the separation. Certain additional information will be provided by amendment to the Form 10.  A copy of the Form 10 is available at the SEC’s website at www.sec.gov or on the investor relations page of the Company’s website at ir.demandmedia.com.

 

The separation is subject to a number of conditions including, among others: (i) approval of the separation by the Company’s board of directors; (ii) the Form 10 being declared effective by the SEC; (iii) unless waived by the Company’s board of directors, receipt by the Company of a private letter ruling from the Internal Revenue Service and an opinion from tax counsel substantially to the effect that, among other things, the separation will qualify as a transaction that is tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended; and (iv) approval for listing by the national securities exchange on which Rightside decides to list its common stock. There can be no assurance that the separation will ultimately occur or, if it does occur, as to its terms or timing.

 

The full text of the press release is included as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

 

Forward-Looking Statements.  This Current Report, the investor presentation and the press release contain statements that constitute forward-looking statements which can be identified by the use of words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” and “estimate” and similar expressions that do not relate to historical matters. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company or Rightside to differ materially from those anticipated, expected or projected. Such factors include, among others, the Company’s ability to complete the separation of its business.  The Company does not intend to, and undertakes no obligation

 

2



 

to, update any forward-looking information to reflect events or circumstances after the date of this Current Report or to reflect the occurrence of unanticipated events, except as required by law.

 

Item 9.01.                                                                                        Financial Statements and Exhibits.

 

(d)                                 Exhibits

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release Announcing Filing of Form 10, dated January 13, 2014

 

3



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

Date: January 13, 2014

 

DEMAND MEDIA, INC.

 

 

By:

/s/ Shawn Colo

 

 

 

Shawn Colo

 

 

 

Interim President and Chief Executive Officer

 

4



 

INDEX TO EXHIBITS

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release Announcing Filing of Form 10, dated January 13, 2014

 

5



Exhibit 99.1

 

Demand Media Announces Filing of Form 10 Registration Statement for Planned
Separation of Domain Name Services Business

 

A significant milestone in preparing Rightside Group to become an independent, public company

 

SANTA MONICA, Calif.—(BUSINESS WIRE)—January 13, 2014—  Demand Media, Inc. (NYSE: DMD), a leading media and domain name services company, today announced that its newly formed wholly owned subsidiary, Rightside Group, Ltd. (“Rightside”), has filed a Form 10 registration statement with the Securities and Exchange Commission in connection with the planned spin-off of Rightside as an independent  publicly traded company.  The filing marks an important step reached on Rightside’s path to becoming an independent company that will be one of the world’s largest pure-play, end-to-end domain name services providers.

 

“The Form 10 filing marks another key milestone for the planned separation and spin-off in 2014, as we have steadily been making progress in establishing Rightside as a leading player in the domain name services industry,” said Shawn Colo, Demand Media’s Interim President and Chief Executive Officer, who will also be a Director of Rightside following the separation.

 

In order to capitalize on the historic launch of new generic Top Level Domains (gTLDs) under the Internet Corporation for Assigned Names and Numbers (ICANN) program, Demand Media has made significant investments in its domain name services business, including securing interests in registry operator agreements or applications for more than 100 new gTLDs.  The new gTLDs create a new and better way to organize the Internet, greatly expand the inventory of domain name suffixes containing descriptive web addresses, and open new business opportunities for international adoption of native language web addresses.

 

These investments further strengthen Rightside’s existing business, with approximately 15 million domain names under management and a network of more than 20,000 active resellers and more than 225,000 retail customers. The new company will own and operate an ICANN-accredited registry (United TLD) and ICANN-accredited registrars providing services to wholesale customers through eNom and to retail customers through Name.com. It will also offer extensive aftermarket services for premium domain names, including domain name auction services through its NameJet joint venture.

 

“We are the world’s largest wholesale Internet domain name registrar and with our newly launched registry, we believe that we will become the exclusive operator of one of the largest portfolios of new gTLDs in the industry.  Our ability to provide a comprehensive platform for the discovery, registration, development, and monetization of domain names will enable us to fulfill Rightside’s mission to advance the way businesses and consumers define and present themselves online,” added Taryn Naidu, Demand Media’s Executive Vice President, Domain Name Services.

 

Demand Media previously announced that Taryn Naidu, who has led Demand Media’s domain name services business since 2011, will become Chief Executive Officer of Rightside, upon completion of the separation.  Additionally, Rightside executive management will include Tracy Knox as Chief Financial Officer, Wayne MacLaurin as Chief Technology Officer and Rick Danis as General Counsel. Dave Panos, who previously served as Demand Media’s Executive Vice President, Emerging Markets and is currently a consultant to Demand Media, will be appointed as Chairman of the Board of Directors of Rightside.

 



 

About Rightside

 

Rightside plans to inspire and deliver new possibilities for consumers and businesses to define and present themselves online. The company will be a leading provider of domain name services, offering one of the industry’s most comprehensive platforms for the discovery, registration, development, and monetization of domain names. This will include 15 million names under management, the most widely used domain name reseller platform, more than 20,000 distribution partners, an award-winning retail registrar, the leading domain name auction service through its NameJet joint venture and an interest in more than 100 new Top Level Domain registry operator agreements or applications. Rightside will be home to some of the most admired brands in the industry, including eNom, Name.com, United TLD and NameJet (in partnership with Web.com). Headquartered in Kirkland, WA, Rightside will have offices in North America, Europe and Australia.  For more information please visit www.rightside.co.

 

About Demand Media

 

Demand Media, Inc. (NYSE: DMD) is a leading digital media and domain services company that informs and entertains one of the internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers, individuals and businesses to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information about Demand Media, please visit www.demandmedia.com

 

Cautionary Information Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Statements containing words such as may, believe, anticipate, expect, intend, plan, project, and estimate or similar expressions constitute forward-looking statements.  Statements regarding Demand Media’s and Rightside’s future financial performance and plans for executing the spin-off are based on current expectations, estimates and projections about our industry, financial condition, operating performance and results of operations, including certain assumptions related thereto. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Forward-looking statements involve risks and uncertainties including, among others: our ability to complete a separation of our business into two independent public companies and unanticipated developments that may delay or negatively impact such a transaction; the possibility that we may decide not to proceed with the separation of our business if we determine that alternative opportunities are more favorable to our stockholders; the possibility that we decide to separate our business in a manner or time frame different from that previously disclosed; the impact and possible disruption to our operations from pursuing the separation transaction; our ability to retain key personnel; the high costs we will likely incur in connection with a separation transaction, which we would not be able to recoup if such a transaction is not consummated; the expectation that the separation transaction will be tax-free; revenue and growth expectations for the two independent companies following the separation of our business; the ability of each business to operate as an independent entity upon completion of a separation; our ability to successfully pursue, acquire and operate new gTLD registries; the impact on our registry business given our limited experience in providing back-end infrastructure services to new and existing registries; the impact of any delays, limitations or even cancellations in introducing new gTLDs; changes to ICANN’s gTLD registry operator agreement and its governing policies that could adversely affect our registry business; our ability to successfully market and sell our gTLDs; the difficulty in predicting and developing consumer demand for new gTLDs; and uncertainties surrounding the timing and results of the review of the Form 10 registration statement by the Securities and Exchange Commission. More information about potential risk factors that could affect our operating and financial results are contained in our annual report on Form 10-K for the fiscal year ending December 31, 2012 filed with the Securities and Exchange Commission (http://www.sec.gov) on March 5, 2013, and as such risk factors may be updated in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, including, without limitation, information under the captions Risk Factors and Management’s

 



 

Discussion and Analysis of Financial Condition and Results of Operations. The Company does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future.

 

 

Contacts

 

Media Contact:
Jean Lin
Demand Media
(310) 319-6854
Jean.Lin@demandmedia.com

 

Investor Contact:
Julie MacMedan
Demand Media
(310) 917-6485
Julie.MacMedan@demandmedia.com