Delusional CEO Says Google Punishes Successful L.A. Companies

Richard Rosenblatt shouldn't have much to complain about. The former MySpace CEO made a hefty fortune selling a few startups during the dotcom boom before co-founding Demand Media. But the tech titan still thinks Silicon Valley has punished him for living in Los Angeles.

"People don't like success — and they don't like LA people who are successful," Rosenblatt whined to Re/code's Nellie Bowles.

The only person who would call his last business a success is Rosenblatt. Demand Media paid a thousand writers $20 a post to pump out how-tos on eHow. The business model was simple: take the worst cuts of Yahoo Answers and turn them into SEO-optimized sausage.

While Demand Media went public for a blistering $2 billion in 2011, its articles were largely useless, with titles ranging from "How to Boil Water" to "How to Turn on a Mac Computer." Google, in an effort to serve up quality content to its users, dropped Demand's articles down in the search results. The company's traffic plummeted and its shareholders were left researching "How to Write Off a Worthless Stock."

After that, Demand Media's stock price collapsed. While many think Google was right to try to surface better content for its users, Rosenblatt still thinks the move was unfair and more of a blunt instrument than a combing out of bad content, born of a lack of knowledge about each other's businesses. "Silicon Valley was happy to see us going down. They never want LA to succeed," he said, talking about the Google move. "Being an LA tech company, they want us to fail."

The theory that Google, then a company with a ~$180 billion market cap, screwed Demand Media over a geographic beef is silly. But that hasn't stopped Los Angeles's persecution complex. According to Re/code, it's common to hear local founder's complain about the Bay Area's continued "arrogance" towards L.A.

At one point, Rosenblatt dialed down the hubris and admitted that a lot of Los Angeles tech companies "didn't turn out that great." Valleywag loves a good conspiracy theory, but that explanation sounds far more plausible than a cabal of Valley bosses turning the screws on Southland startups.

[Photo: Getty]