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Demand Media said its cofounder and CEO Richard Rosenblatt is leaving the company. He resigned his role as chairman effective immediately and his last day as CEO is October. 31.
Another cofounder, Shawn Colo, is stepping up to be interim CEO.
The company did not say why they were making the change but at least one analyst isn't all that surprised. Founded in 2006, the company was considered a media experiment. It created content using a network of freelancers and made money by selling ads. Its how-to articles and videos were designed to do well in search results. Its websites include eHow, Livestrong and Cracked.
Demand Media went public in 2011. But shortly after its IPO, Google changed its algorithm to stop giving high search results to so-called "low-quality" sites.
Such changes hurt Demand Media and sent the company into " overall strategic drift ," Jordan Rohan, an analyst with Stifel, wrote in a note to investors, reports Reuters Jennifer Saba.
The stock was trading below $6, down 44% from a high of $10.50 this year and well below its IPO price of $17.
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