MediaPost.com has an article explaining the business of “content farms,” which automatically assign “stories” to nonprofessional freelancers based on user interest and their search engine optimization potential.

SFGate began using content farm material this week for its “Home Guides” section.

It’s a big business. One content farm, Demand Media, announced today it was planning a $125 million IPO. Another farm, Associated Content, was acquired by Yahoo in May for $100 million, according to Advertising Age.

“Associated is in the business of generating a great deal of freelancer-produced content that can earn as little as $5 a story, and is optimized for search. (Examples of stories include “Guide to Reducing Stress in Daily Activities” and “Five Hollywood Career Revivals Waiting to Happen.”),” the Advertising Age story said.

Hearst is using Demand Media’s Content Channels to supply material to the websites associated with the SF Chronicle and Houston Chronicle.

“In the case of the Houston Chronicle’s Chron.com, the team worked with Demand Media to create a “Small Business Resource Center” to complement its existing business news coverage by incorporating thousands of business-related articles and videos,” MediaPost reported.