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DISCLAIMER: THE MATERIAL SET FORTH IN THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS

This presentation contains certain forward-looking statements. All statements other than statements of historical facts contained in

this presentation, including statements regarding Demand Media, Inc.’s (“Demand Media” or the “Company”) future results of

operations and financial position, business strategy, plans and objectives for future operations, are forward-looking

statements. The Company has based these forward-looking statements largely on its current expectations and projections about

future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, short

term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a

number of risks, uncertainties and assumptions, including those described under the heading “Risk Factors” in the Company’s

periodic reports filed with the Securities and Exchange Commission (the “SEC”), which are incorporated herein by

reference. Moreover, the Company operates in a very competitive and rapidly changing environment. New risks emerge from

time to time. It is not possible for Company management to predict all risks, nor can the Company assess the impact of all factors

on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those

contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the

forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially

and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events or results. Although the Company believes

that the expectations reflected in such forward-looking statements are reasonable, the Company cannot guarantee that the future

results, execution of its business strategy, including its proposed business separation, as well as short term and long-term

business operations, plans and objectives, levels of activity, performance or events and circumstances reflected in the forward-

looking statements will be achieved or occur. Moreover, neither the Company nor any other person assumes responsibility for the

accuracy and completeness of such forward-looking statements. Except as required by law, the Company undertakes no

obligation to update publicly any forward-looking statements for any reason after the date of this presentation, to conform these

statements to actual results or to changes in the Company’s expectations.

The Company is publicly traded on the New York Stock Exchange under the ticker symbol “DMD” and is a registrant under the

rules and regulations promulgated by the SEC. Before evaluating whether you should consider an investment in the Company’s

securities, you should read the Company’s annual, quarterly and period reports filed with the SEC, including all of the disclosures

set forth therein, including under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition

and Results of Operations.” The Company’s SEC filings can be found at www.sec.gov and ir.demandmedia.com.

May 2013 Investor Presentation

http://www.sec.gov/

ir.demandmedia.com

3


5

intent-based content that we know users want

CREATE

qualified intenders and brands through

unique opportunities to engage

DISTRIBUTE

through multiple platforms and

content formats

MONETIZE


to billions of signals of people’s intentions

LISTEN

•

•

•

How to Cook a Whole Chicken

Benefits of Almond Oil

How to Open a Bottle of Wine Without a Corkscrew

How to Get Kool-Aid Out of a White Carpet

VIDEO: How to Make a Nicoise Salad

8

Foundational Content:

• How-To Articles

• How-To Videos

• Informative Articles

Feature Content:

• Feature Articles

• Feature Video

Series

• Slideshows

• Blog Content

Informative Articles Slideshows

Premium Video Series

How-To Video Series

Feature Articles How-To Articles

Mobile Slide Step

Blog Content


9

Diversified Distribution(3)

More than 126M(1) WW Unique Visitors in March 2013

Growing Audience(2)

(1) comScore

(2) Internal Company Data

(3) Based on New Content Production May 2013 Investor Presentation

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

Mar-10 Mar-11 Mar-12 Mar-13

DM O&O PVs

O&O Network

Q1 2013

O&O Network

Q1 2012

Mills

Mar-13

10

Demand Media comScore Category Rank1

Home &

Garden

Personal

Finance Health Pets

Technology

News

2008 NM NM #32 NM #28

2009 #1 #8 #15 #12 #9

2010 #1 #3 #3 #6 #8

2011 #1 #2 #3 #3 #6

Today(2) #1 #2 #3 #4 #6

Current

Uniques 16MM 10MM 25MM 3MM 13MM

#38 2008

#12 Apr‘13

Demand Media

comScore Rank1

(1) US data only

(2) April 2013


11

Advertising strategy optimized to

leverage Demand Media’s

INTENT-DRIVEN AUDIENCE:

Direct sales of customized and high

share-of-voice advertising experiences

Network sales of quality standard

inventory on desktop and mobile

devices

Contextually relevant, “cost per click”

units optimized in partnership with

Google AdSense team

Total Ad Revenue

Direct Display

Network Display

Performance

Advertising Stack


12

Content Partners

Mobile

International

Commerce

• Subscription

• On-Demand

• Expert Advice

• Over 200M page

views

• More than 50M visits

• Strong Social

Engagement • Mobile 10% of 1Q13 C&M

Revenue

• Additive to desktop

• 370% PV growth YoY

• High IRRs

• New channels

launching each Q

New Content

• Plan to double spend in 2013

• Attractive IRRs


13 May 2013 Investor Presentation

+20% Crafts

ProprietaryAlgorithms

& Technology

Expert-Driven

Creation Platform

Massive Audience

Reach

Targeted

Discovery

14

Diverse

Monetization

Capabilities


16

#2 registrar worldwide

Over 15M domain names under management(1)

#1 wholesale registrar worldwide

Recurring revenue, subscription-based service business

(1) Includes approximately 1.5 million domains from the acquisition of Name.com in December 2012



Extensive Distribution Value Added Services After Market Services

B2B

B2C

Whois Privacy

Email Services

Website Creator Tools

SSL Certificates

Shared Hosting

Solutions

Domain Auctions

Domain Marketplace

18

INCREASED

CUSTOMER

CHOICE

BETTER

BRANDING IMPROVED

DISCOVERY

NEW gTLDs to DRIVE INDUSTRY GROWTH:


corporatelawyerinsanfrancisco.net

For example:

Corporate.attorney


20%

Crafts

DMD’s HIGHER MARGIN REVENUE STREAMS:

BACK-END

REGISTRY

SERVICES

INCREASED

VOLUME

FOR

REGISTRAR

REGISTRY

.dance

.rehab .ninja

.engineer

REGISTRY REGISTRAR

DISTRIBUTION

REGISTRY

SERVICES

AFTERMARKET

.dance .ninja

.engineer .rehab

.pub .social

…

May 2013 Investor Presentation 20

22

Board has authorized plan to explore the separation of our business into

two publicly traded companies:

A LEADING DIGITAL MEDIA COMPANY with a powerful

outsourced content creation platform that organically grows its

audience, leading web properties that reach over 126 million(2)

monthly unique visitors, and an integrated monetization platform

that incorporates branded, network and mobile revenue streams;

and

A LEADING END-TO-END DOMAIN SERVICES

COMPANY offering registry services, expansive wholesale and

retail distribution, and comprehensive aftermarket services.

(1) This transaction is subject to a number of conditions, including final approval of the transaction by Demand Media’s board, favorable tax rulings and

opinions regarding the tax-free nature of the transaction to Demand Media and to its stockholders, further due diligence as appropriate, and the

effectiveness of required filings with the Securities and Exchange Commission (“SEC”). There can be no assurance that the separation of Demand Media’s

business into separate companies as previously disclosed will occur.

(2) comScore WW March 2013


o

o


Re

ve

nu

e

Time

Strong “Same Store” Growth

Rev

en

ue

Time


26

(1) Direct Margin reflects variable costs to ICANN and registry fees only.


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

.COM .NINJA

Direct Margin(1)

~20%

~90%

$-

$50

$100

$150

$200

$250

$300

$350

$400

2010 2011 2012

Registrar Revenue Content and Media Revenue ex-TAC

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Q1 12 Q1 13

Registrar Revenue Content & Media ex-TAC

(1) Revenue ex-TAC. This non-GAAP financial measure is described and reconciled to its comparable GAAP measure in the accompanying tables available in

the Appendix to this presentation as well as the Supplemental Data Schedule within the Quarterly and Annual Results tab of the investor relations section of

the Company’s website at ir.demandmedia.com. 27

$100

$134

$241

$312

$361

+28% yoy

+30% yoy

+16% yoy

$141

$119

$193

$227

$60

$83

$95

$32

$51

$35

+9% yoy

+15% yoy


24.0%

24.5%

25.0%

25.5%

26.0%

26.5%

27.0%

27.5%

28.0%

28.5%

29.0%

$-

$20

$40

$60

$80

$100

$120

2010 2011 2012

Adj EBITDA Margin

26.0%

26.5%

27.0%

27.5%

28.0%

$20

$21

$22

$23

$24

$25

$26

Q1 12 Q1 13

Adj EBITDA Margin

Mills

(1) Adjusted EBITDA. This non-GAAP financial measure is described and reconciled to its comparable GAAP measure in the accompanying tables available in

the Appendix to this presentation as well as the Supplemental Data Schedule within the Quarterly and Annual Results tab of the investor relations section of

the Company’s website at ir.demandmedia.com.

(2) Adjusted EBITDA as a percent of Revenue ex-TAC. 28

26.7%

$62

25.8%

27.5%

28.6%

$86

$103.4

$25 $103

Mills


$22

26.4%

UNIQUE and SCALABLE Content Creation and Monetization

Platform with one of the Largest O&O Audiences in the World

Well Positioned to Further DIVERSIFY Distribution and Revenue Models

Substantial CASH FLOW Generation to Invest in Long-Term Growth

WORLD’S LARGEST Wholesale Domain Name Registrar

Leading Participant in NEW gTLD Opportunity

TRANSFORMING REGISTRAR into one of the Largest End-to-End Domain Services

Providers


32

To provide investors and others with additional information regarding the Company’s financial results, this presentation includes the following non-GAAP financial

measures: adjusted earnings before interest, taxes, depreciation and amortization expense, or Adjusted EBITDA, revenue less traffic acquisition costs, or Revenue less

TAC, discretionary free cash flow and total free cash flow. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial

measures has been included in the appendix to this presentation. The Company’s non-GAAP Adjusted EBITDA financial measure differs from GAAP Net Income in that

it excludes taxes, interest and other expenses (income), as well as certain expenses such as depreciation, amortization, stock-based compensation, the financial

impact of acquisition and realignment costs, the formation expenses directly related to its gTLD initiative, and any gains or losses on certain asset sales or dispositions.

The Company’s non-GAAP Revenue less TAC financial measure differs from GAAP as it reflects the Company’s consolidated revenues net of its traffic acquisition

costs. The Company’s non-GAAP free cash flow financial measures differ from GAAP as discretionary free cash flow reflects the Company’s cash flows from operating

activities, excluding cash outflows from acquisition and realignment activities, the formation expenses directly related to i ts gTLD initiative, and expenditures related to

the separation of Demand Media into two distinct publicly traded companies, less capital expenditures; and total free cash flow reflects discretionary free cash flow net

of intangibles investment.

The Company uses these non-GAAP financial measures to measure its consolidated operating performance, to understand and compare operating results from period

to period, to analyze growth trends, to assist in internal budgeting and forecasting purposes, to develop short and long term operational plans, to calculate annual bonus

payments for substantially all of its employees, and to evaluate its financial performance. The Company also frequently uses Adjusted EBITDA in its discussions with

investors, commercial bankers and other users of the Company’s financial statements.

Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period to period

comparisons and analysis of trends. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period to period

comparisons of the Company’s business underlying recurring revenue and operating costs which is focused more closely on the current costs necessary to utilize

previously acquired long-lived assets. In addition, the Company believes that it can be useful to exclude certain non-cash charges because the amount of such

expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating decisions. For example, due to the long-lived nature of the

Company’s media content, revenue generated from the Company’s content assets in a given period bears little relationship to the amount of the Company’s investment

in content in that same period. Accordingly, Management believes that content acquisition costs represent a discretionary long-term capital investment decision

undertaken by management at a point in time. This investment decision is clearly distinguishable from other ongoing business activities, and its discretionary nature and

long term impact differentiate it from specific period transactions, decisions regarding day-to-day operations, and activities that would have immediate performance

consequences if materially changed, deferred or terminated.

The Company believes that Revenue less TAC is a meaningful measure of operating performance because it is frequently used for internal managerial purposes and

helps facilitate a more complete period to period understanding of factors and trends affecting the Company’s underlying revenue performance.

Accordingly, the Company also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating

the Company’s consolidated revenue and operating results in the same manner as Company management and in comparing financial results across accounting periods

and to those of peer companies.

The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense that affect the Company’s operations. The

Company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP

financial measures should be considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, these non-GAAP measures may

differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. The Company encourages

investors and others to review the Company’s financial information in its entirety and not rely on a single financial measure.


33

(In thousands, except per share data) Q1 12 Q1 13 2010 2011 2012

Revenue

Content & Media $ 53,963 $ 65,291 $ 152,911 $ 205,450 $ 246,399

Registrar 32,271 35,329 100,026 119,417 134,179

Total Revenue $ 86,234 $ 100,620 $ 252,937 $ 324,866 $ 380,578

TAC (Traffic Acquisition Cost) (1) $ 3,379 $ 5,436 $ 12,213 $ 12,494 $ 19,442

Content & Media ex-TAC $ 50,584 $ 59,855 $ 140,698 $ 192,955 $ 226,958

Registrar 32,271 33,329 100,026 119,417 134,179

Total Revenue ex-TAC $ 82,854 $ 95,184 $ 240,724 $ 312,372 $ 361,137

Adjusted EBITDA (In thousands)

Net income (loss) $ (1,842) $ 669 $ (5,325) $ (18,525) $ 6,176

Tax Provision (1,195) 373 3,897 4,178 1,783

Interest & Other Expenses 141 224 948 1,219 691

Depreciation 4,964 5,345 18,266 20,958 19,658

Amortization of intangible assets (2) 11,956 9,559 33,751 47,174 40,676

Stock-based compensation (3) 7,391 7,263 9,689 28,855 31,368

gTLD expense (4) 429 1,618 2,650

Acquisition and realignment costs (5) 61 376 779 2,100 446

Adjusted EBITDA $ 21,905 $ 25,427 $ 62,005 $ 85,958 $ 103,448

Notes:

Some figures in this presentation may not foot due to rounding.

(1) Traffic acquisition costs comprise the portion of Content & Media GAAP revenue shared with the Company's network customers.

(2) Represents the amortization expense of our finite lived intangible assets, including that related to our investment in media content assets, included in our GAAP results of operations.

(3) Represents the fair value of stock-based awards and certain warrants to purchase our stock included in our GAAP results of operations.

(4) Comprises formation expenses directly related to the Company's gTLDs initiative that did not generate associated revenue in 2012 or in Q1 2013.

(5) Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenues and costs, (2) legal,

accounting and other professional fees directly attributable to acquisition activity, (3) employee severance payments attributable to acquisition or corporate realignment activities, and (4) gain on sale of assets. Management does not consider these expenses as indicative of the Company’s ongoing operating results or future outlook.


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