Goldman leads $100M Demand round

Other investors with stakes in Santa Monica, Calif.-based Demand include 3i Group plc of London, Oak Investment Partners of Westport, Conn., and Spectrum Equity Investors of Boston.

It was not immediately clear whether all existing stakeholders participated in the new round, although Demand senior vice president of corporate communications Quinn Daly confirmed that Goldman provided the lion's share of the funding.

The round follows a $100 million investment led by 3i in September 2006 and a $120 million initial round from Oak and Spectrum upon the company's establishment in April 2006.

The deal marks a second joint pursuit for Goldman managing director Gaurav Bhandari and Demand chief executive Richard Rosenblatt, who serve together on the board at digital marketing agency iCrossing Inc. of Scottsdale, Ariz. Rosenblatt, who was chief executive of the former parent company of social networking giant MySpace before its sale to News Corp., serves as iCrossing's chairman.

Daly confirmed that Demand is now profitable, but she would not discuss its valuation or other terms of the deal. She would not confirm reports that have surfaced valuing the company as high as $1 billion.

Demand's revenue comes from two primary sources. Customers pay for domain name registration services, and marketers pay Demand to advertise on its enormous network of sites.

The company has acquired a large roster of domain names, ranging from common words to misspellings of other Web addresses, which it uses variously to publish user-generated content and sell advertising.

Daly hinted that Demand's pattern of acquiring other Web properties is likely to continue. She said the company is 'always looking' for acquisition candidates and plans to stay on its current growth trajectory.

The startup acquired video hosting company ExpertVillage.com Inc. of Austin, Texas, this summer. Its 2006 purchases included travel and sports niche site operator Hillclimb Media of Seattle and domain name registrars eNom Inc. of Bellevue, Wash., and eHow Inc. of San Francisco.

Daly declined to speculate whether a public offering is in the works or whether Goldman is expected to play a role in the listing process if it occurs.