WOW!! What a fascinating Wired article that is.
I had only recently learned that many people (including bloggers) were making money with search engine optimization and messing about with keywords. Trying to choose what to write about based on what would earn the most money due to search results. That's why companies have been buying blogs and using them as marketing platforms while keeping the content going mostly in zombie status. I think it's a bunch of crap, and I'm amazed those sites make money at all.
But Demand Media's model is ridiculous. Reading the description, it sounds like a giant parasite on the Internet - especially if you note the other shitty online businesses the founder was involved in before starting Demand.
The interesting part is the tie-in with Google via YouTube. Normally, Google tries to block content factories like this, since users naturally see through the cheap content and prefer real stuff. But if YouTube is making good bucks from Demand Media, the search engine branch of Google may see pressure to keep including junky results.
Still, I'll make a prediction that this is just an early stage in the game. The internet is like a big field of fertile soil, and Demand media has blown a bunch of weed seeds out across it which have sprouted. In the long run, good-quality stuff will tend to outcompete the weeds and take over in the most popular niches. Advertisers will gradually abandon ehow as they chase us, the customers who are blocking ehow from their search results. Google may even be forced to deprioritize content farms like this further than they already have, if that's what we users want. Otherwise, another search engine will do it, and take our business away.