TechTarget makes trio of big moves

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With $70 million in venture capital funding burning a hole in its pocket, TechTarget made a flurry of moves over the past several weeks that have made it clear the information technology media company aims to be a big player for a long time to come.

In the past five weeks, Needham, Mass-based TechTarget announced:

  • The planned launch in April 2005 of a monthly magazine called CIODecisions, aimed at midmarket IT executives.
  • The acquisition of TheServerSide Communities from Veritas Software Corp.
  • The $40 million cash acquisition of Bitpipe, a company specializing in the distribution of high-tech white papers.

By far the largest deal was the purchase of Bitpipe, which brings together two companies that are leaders in generating leads for b-to-b tech marketers. "That's huge," said Sarah Fay, president of Carat Interactive. "These guys [TechTarget] are smart. They seem to have a laser focus on what interests the segment and, quite honestly, Bitpipe has been a beautiful lead-generating tool."

the Competition is watching

"I'm sure TechTarget's competitors are not celebrating this," Sam Whitmore, editor of, said of the deal. "I don't think the IDGs and CMPs are going to suddenly take on water and sink or anything. But now they have a stiffer competitor, and they're going to have to respond somehow."

Privately held TechTarget said Bitpipe is a profitable company with revenue that grew 75% in 2003 and more than 50% this year. TechTarget said the combined company should generate revenue of $80 million in 2005. TechTarget expects to record about $50 million in revenue this year. "This catapults us into a different league," TechTarget CEO Greg Strakosch said of the Bitpipe acquisition.

Jay Habegger, co-founder and CEO of Bitpipe, has joined TechTarget as exec VP-media products. Media investment bank Jordan, Edmiston Group advised Bitpipe on the deal, and Jordan, Edmiston's Tolman Geffs, managing director, said he expected more deals in this arena. "There's a little bit of a race going on," he said.

The fact that TechTarget paid cash for Bitpipe is interpreted in some quarters as a signal that the company plans to go public in the near future. "We think our stock is really valuable," Strakosch said, "and we don't want to give it up. We had the wherewithal to do this acquisition with cash, and cash is our preferred currency."

He did point out, however, that the company didn't need to go public, because it had access to capital. "We could go public right now," he said. "We could go public in three months. We could go public three years from now."

The launch of CIODecisions shows that TechTarget is also attempting to expand organically. Strakosch has long disparaged broad IT publications, but he's willing to make a big bet on CIODecisions. "It's fair to say that the Fortune 1,000 CIO market is overpublished and overserved, but it's also fair to say that the midmarket is grossly underserved," he said.

The midmarket is exactly what TechTarget is aiming for with the CIODecisions Media Group, which will also include events and the Web site The print publication will have a controlled circulation of 60,000.

Running the publication is the talent TechTarget attracted with a portion of its VC funding. Last summer, it hired Joe Levy, who founded CIO for International Data Group in 1987. TechTarget also hired Maryfran Johnson, who came to TechTarget earlier this year from IDG's Computerworld. She will be the editor in chief of CIODecisions.

A return to the niche

With its acquisition of TheServerSide Communities, TechTarget is returning to its core strength: the operation of niche Web sites. The deal included several niche properties, such as, TheServerSide.Net and TheServerSide Java Symposium. Floyd Marinescu, founder of and former general manager of TheServerSide communities, has been named publisher of TechTarget's Application Development Media Group.

The TechTarget model appears to be working. The company said it posted 39% revenue growth in the first nine months of this year, compared with the same period last year. "They've figured out how to make money where nobody else has," said Seth Alpert, managing director at AdMedia Partners.

Other IT media companies have followed TechTarget's lead, creating niche communities on the Web. One of those, Ziff Davis Media, announced on Dec. 6 that it had completed an acquisition similar to TechTarget's purchase of TheServerSide Communities.

Ziff Davis acquired DeviceForge, a privately held vertical online b-to-b publishing company. With the deal, Ziff Davis takes control of several vertical technology and information Web sites, including, and

Jason Young, president of Ziff Davis' Internet and consumer technology group, said, "This is a great example of an asset that is very focused." But he added that what differentiates Ziff Davis from a company such as TechTarget is, "Our Internet business is a combination of horizontal brands (such as eWeek and PC Magazine) mixed with very vertical brands."

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