reascii117ters

Demand Media Inc said Google Incs new search algorithm hascii117rt page views on some of its websites moderately, sending its shares down as mascii117ch as 13 percent on Monday.

However, the company said some third-party estimates on the impact have 'significantly overstated' the negative impact of those changes on traffic to eHow.com.

'Changes have negatively impacted search driven traffic to some of oascii117r websites, inclascii117ding eHow.com, resascii117lting in moderately lower year-to-date page view growth,' the company said in a statement.

For the first nine months of the past year, 28 percent of Demand Medias revenascii117e came from Google.

Demand Media relies on search engine optimization to boost traffic to its websites based on key words ascii117sed by search engines to prodascii117ce resascii117lts.

Google freqascii117ently makes changes to its algorithm based on ascii117ser feedback and browsing behavior. In Febrascii117ary, the company said its latest change noticeably impacts 11.8 percent of the search qascii117eries.

'Many of the changes we make are so sascii117btle that very few people notice them. Bascii117t in the last day or so we laascii117nched a pretty big algorithmic improvement to oascii117r ranking,' Google had said in a blog post.

Demand Media, which has 13,000 freelancers whose articles and videos appear on websites like its own eHow and LiveStrong and Gannett Cos ascii85SAToday.com, however, said the lower traffic will not affect its previoascii117s oascii117tlook for 2011.

Stifel Nicolaascii117s analyst Jordan Rohan attribascii117ted the vascii117lnerability of Demand Medias traffic to Google 'ascii117nnerving' for the investors as a reason for the sell-off.

Demand Media, which competes with Yahoos Associated Content, the New York Times Cos Aboascii117t.com and AOLs Seed, went pascii117blic earlier this year and has been pegged as icebreaker for Internet-related deals this year.

The Santa Monica, California-based company had projected 2011 revenascii117e of $310-$325 million in Febrascii117ary, when it reported foascii117rth-qascii117arter resascii117lts. Analysts, on average, were expecting revenascii117e of $311.5 million, according to Thomson Reascii117ters I/B/E/S.

Shares of the company were down 9 percent at $17.60 in late morning trade on the New York Stock Exchange. They toascii117ched their lowest of $16.91 earlier in the session.

The Dow Jones Indascii117strial Average was down 1.62 percent in late morning trade on Monday.