Demand Media reports record revenue and profit

The better-than-expected results, also buoyed by a partnership with Google Inc's YouTube, prompted Demand Media to raise its full-year outlook.

I think this is the first time we saw an indication of the YouTube deal impacting the numbers, said Sean Kim, an analyst with RBC Capital Markets.

Demand Media relies on freelance writers, photographers and videographers to provide articles and videos designed to appear at the top of Internet searches that in turn generate advertising.

The company said third-quarter revenue, excluding traffic acquisition costs, rose 19 per cent to $92.8 million. Analysts on average were expecting $91.5 million.

Demand Media's audience surpassed 125 million monthly unique visitors during the third quarter, as we delivered record revenue and profitability, Richard Rosenblatt, chairman and chief executive of Demand Media, said in a statement.

Demand Media, which went public last year, is being carefully watched as a new media model that lowers the costs of producing content.

Last year, however, Demand Media had to shift its business model when Google made changes to the way its search engine produced results to weed out content it considered low quality.

The company cleaned up its archives and implemented checks to raise the level of its content and also struck up a partnership with the Internet search company in the fourth quarter of last year.

That alliance to produce content to its channels helped boost the amount of revenue Demand received

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