Last Updated Nov 4, 2009 7:24 AM EST
I've had my own criticisms of Demand offering people $7 to $15 for an article of several hundred words, particularly as the company apparently brings in $200 million a year. But there is a different and larger issue at hand. Demand, and other companies that want to emulate it, are creating the Internet's implementation of the economic theory that bad money drives out good. And the ones who will pay the price are most who depend on the Internet as a source of information and marketing.
In the 16th century, Sir Thomas Gresham noted that "good and bad coin cannot circulate together." People would shave coins to keep some of the precious metal. The altered currency had less intrinsic worth and consumers would spend them, keeping the unadulterated ones for themselves. Eventually an English economist would formulate Gresham's Law, which states that bad money drives out good money.
The Internet's coin is information. What Demand and others looking at such business models are doing is creating sites that try to game the search engines by filling up with content (information) that is heavy on the right keywords. This material is cranked out and, of necessity, generally thin in what it offers because the writers are generally trying to write two to four stories an hour to increase their hourly wages.
But then, the content doesn't need to be much more because it's search bait. And as a lure, massive amounts of content can be spectacularly effective. According to comScore's September numbers, Demand Media was 15th among top Internet properties for unique U.S. visitors. That's better than Comcast, Gannett, NBC Universal. It's better than Turner Network, Viacom Digital, and the New York Times Digital. The month before, Demand was in 21st place. The "bad" content of Demand Media is literally pushing out the "good" media.
As it grabs more attention from the search engines, it and others will take up more of the front pages of search space results. Once sites are off those first few pages, the chances of people actually going to them are slim. As Roth puts it:
To appreciate the impact Demand is poised to have on the Web, imagine a classroom where one kid raises his hand after every question and screams out the answer. He may not be smart or even right, but he makes it difficult to hear anybody else.Search results increasingly come to be dominated by a few sites, which then dominate advertising rates and the dissemination of information. And if the content is ultimately inadequate, it could also drive people away from the search engines, completely changing the nature of the Internet.
Illustration via stock.xchng user ilco, site standard license.