NEW YORK (AdAge.com) -- Two Hearst newspapers' websites have gone live with new sections from Demand Media, one of the content-generation companies that tap thousands of freelancers to generate countless articles.

Some observers argue that these so-called content farms are winning web traffic and ad revenue away from traditional publishers without matching the quality that traditional newsrooms provide. But Demand has been providing a travel tips section for USA Today since April, and BNET reported that same month that Demand had signed a deal with two Hearst papers, the San Francisco Chronicle and the Houston Chronicle.

Now that the newspapers' sections from Demand are live -- a Homes Guide in San Francisco and a small-business section in Houston -- we asked Michele Slack, VP of digital media for SFGate.com, the website for the San Francisco Chronicle, why the paper is working with Demand Media, how it protects its editorial standards and whether partnerships like these make a few staff reporters obsolete or not.

Ad Age: Why did you decide to add Demand Media content?

Ms. Slack: We have an overall strategy at SFGate to partner with other companies to basically enhance our content, to broaden our coverage and to provide our users with a breadth of valuable content that we couldn't if we were not partnering.

We took at look at what Demand had done both with LiveStrong.com and with USA Today and liked what we saw there. They allowed us to build out an entire content channel. We liked how they were approaching the work and what the end product ultimately wound up looking like.

We have partnerships with everyone from Sunset magazine to Business Insider to Bloomberg to IDG. We partner with a number of hyperlocal blogs. With Bloomberg, they write content for us specifically that appears both in print and online. So partnering for additional content is definitely not something new to us.

Ad Age: How do you protect the editorial quality on your site as you work with these outside providers? You run content from Bloomberg, but you also run posts from BleacherReport, where anyone can apply to post an original sports article.

Ms. Slack: Our partnership with BleacherReport is different from our partnership with Demand in that Demand is powering an entire channel for us. With BleacherReport, we are picking what we put on the site. We can be pretty selective in what we put in front of readers. Our goal is to be the home page for the Bay Area, but we need to have a very strong value that really puts quality front and center.

Every time we look at a partnership, we're looking at them for quality content. While we're willing to do a lot of these partnerships, we're only willing to do them if there's a certain level of quality.

With Demand, when it came to building out this channel, they sent us some pieces that we were able to review and provide feedback on. It's built to be fairly autonomous, but we have weekly calls with the Demand team. And if we see anything, we can go in there in an instant.

Ad Age: Why did you choose real estate as a subject?

Ms. Slack: We batted around a bunch of ideas. We came to real estate for three reasons. The first was there was a strong revenue opportunity -- high ad rates and strong demand from advertisers to be in that type of content. Then second there was a big search interest from consumers. And the third piece is we felt this is an area where there was strong interest from readers and we could be providing them good, valuable, evergreen content that's highly relevant to their life in the Bay Area.

To achieve that last piece, we had to ensure that the writers who were writing these pieces were in many cases local writers who could write to the uniqueness of buying and selling a house in the Bay Area.

Ad Age: Are there subject areas that SFGate would not outsource?

Ms. Slack: In combination with the content that comes out of the newsroom, I think this type of content could enhance our existing content in almost any area. I think about our partnerships with the local bloggers: They're providing us with a lot of actually breaking news that's happening in some of these local communities. Sunset is providing us with travel and garden, backyard-makeover content. Business Insider and IDG provide a lot of business content. Depending on the partner, this type of partnership can enhance just about any area of content

Ad Age: Does bringing in outside content, supplied by freelancers, undermine the need for your own full-time reporters, or does it support the business that pays for the newsroom?

Ms. Slack: I prefer to think it's the latter. This provides us with additional revenue opportunities that we can use to support our core newsroom. Our core newsroom is our competitive advantage, so we really depend on the content they provide us with. These partnerships are about bringing in additional users and incremental revenue. All of that is to support our core business and the newsroom is an integral part of that.

Ad Age: Who sells the ads on the section, and are you sharing the revenue?

Ms. Slack: There are opportunities for both parties to sell ads. Revenue sharing is the main financial component.

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