November 7, 2007 – TechTarget acquires KnowledgeStorm (see press release).
Not quite three years since they acquired Bitpipe, TechTarget has swallowed up another big competitor in the online advertising/content syndication marketplace.
Confession: I never quite figured out KnowledgeStorm. They clearly were more than moderately successful in the marketplace (though I was surprised to read in the TechTarget press release that their annual revenues were only $12-14 million, a fraction of the $80 million forecasted by their new parent company.) I’ve long maintained the suspicion that what success they enjoyed was due more to pure diligence and market presence than to any unique value proposition. I struggle to think of even one client in the last two years or so that has reported a good experience, results-wise, with KnowledgeStorm. Anecdotally, lead quality seems to be the primary issue. Certainly, they rarely appeared on media plans that we developed – in our view, there are simply better, more competitive options in the marketplace.
As an online IT product directory, KnowledgeStorm made sense to an extent, if nothing else as an alternative to pure content syndication, particularly for clients in established product categories looking to attract prospects in the latter stages of the sales cycle. But then when TechTarget swallowed Bitipe, KnowledgeStorm got into the content syndication business as well, largely by picking up the CMP properties that had formed the bulk of the Bitpipe network and that had jumped ship after the acquisition (for competitive reasons; CMP regarded TechTarget as a publisher.)
Then KnowledgeStorm reinvented themselves again and began positioning the site as “vertical search” (even the TechTarget press release calls KnowledgeStorm “a leading search resource for IT professionals”). Maybe some advertisers bit, but to me the move was never more than a company doing its best to jump on the search bandwagon.
If the Bitpipe acquisition is any precedent, KnowledgeStorm will cease to exist in any meaningful way. Pre-acquisition, Bitpipe was a powerhouse lead generation vehicle – a media partner we could always count on to overperform for our clients. Then TechTarget came along, the CMP properties disappeared, and Bitpipe disappeared to the back pages of the TechTarget product catalog. We haven’t used them since.
For the technology advertiser, there are now dozens of viable, effective options – perhaps more – for content syndication. TechTarget – more power to them – clearly have an enormous presence in the marketplace. Their sales force is omnipresent, aggressive, and they do a heck of a job presenting their case.
Still, this is no longer 2004, and people have alternatives. Plenty of them. When Bitpipe disappeared, it changed the content syndication market forever, by opening up a huge competitive void into which a flood of new vendors entered. KnowledgeStorm is about to fade into the media sunset, and I for one think the impact will be negligible.
UPDATE: I have been advised (see comments) that KnowledgeStorm’s revenues last year were actually in excess of $20 Million. The $12-14 million figure was what TechTarget projects to gain from the business.
This is an interesting take on the purchase. Good to see some commentary outside of the Wall St. and the Kool Aid coming from our executive team.
let me know if there’s anything you want to know about TechTarget.
cheers.
Thanks for your input Jon. As an “insider”, what’s your take on the acquisition? What does KnowledgeStorm do for the TechTarget portfolio other than remove a major competitor from the landscape? Do you think it will disappear into the product catalog, as I suspect?
Hey Howard,
This was an interesting post. I dont necesarily agree with all of your points but it was interesting to say the least. From a KS insider’s position, it is difficult to see this acquisition happen. KnowledgeStorm was an interesting business full of challenges, yet still growing year after year. I’d say the KS sales team was talented to say the least. TT will roll up KnowledgeStorm into their product line which means there will be a lot of duplicate jobs.
There really arent any smaller lead generation sites (content syndicators) left if you think about it. First Bitpipe was acquired, then IT toolbox and 20/20 software and now KnowledgeStorm.
Some clarification to one of your points: KS actually did nearly $20 million in revenue last year. The expectations of $12 – $14 million represents what TT expects to keep due to duplication of revenue.
The interesting question to ask of TechTarget is how much growth annually can be attributed to organic growth vs. acquisitions.
Thanks for your input, Mr. H. (can I call you that?) and for the correction on the revenue figure. I respectfully disagree with you about “no small lead gen sites left”, in fact that’s primarily the point of my post. They are PLENTY of those sites out there: NetLine and IT Business Edge are just two that come immediately to mind. And yes, ITToolbox was acquired by CEB but they’re still effectively an independent entity.
I read on another blog this week that TechTarget now has a “lock” on the IT lead generation market. That’s laughable. Today, there’s not one tech client whose target audience we can’t reach, and whose lead goals we can’t fulfill without TechTarget (with KnowledgeStorm or without) as part of the mix. That doesn’t mean they might not be a good fit in some cases. They’re just not the only game in town.
Also, I don’t mean to dismiss KnowledgeStorm entirely: any business you can sell for $58 million clearly has some merit!
The introduction of Salesforce.com at my old company spelled the doom of KS for us there. Set up KS as a campaign, tracked the leads and closed the loop. Little to no revenue.
Our interpretation was that they catered to IT buyers who were doing research…but those same buyers became hip to the fact that it was not an unbiased source of research (it was pay for play) and abandoned it for other sources.
I did always enjoy the research they shared with firms like Marketing Sherpa, though. I hope that still manages to happen from time to time.
Howard,
I feel like I need to do this. I want to make it clear that I am the real Jonathan Brown who works for KnowledgeStorm/TechTarget. The loyal employee who realizes all that KnowledgeStorm has done for him over the past 5 years and is very thankful.
Appropriately enough, I was approached by a fellow employee who asked if I was responsible for the “jon brown” post on November 15. The answer is NO. At first I was going to leave it alone but after actually reading the post I began to worry about people in my network actually believing this post was me and possible repercussions it could cause.
First, I wouldn’t take the time to post. Second, I’m too busy with other things. Well Halo 3 really. Saving the world by slaying Flood with sticky bombs and brute shots is a lot of work. Third, I’m pretty sure I haven’t used the words “Kool” and “Aid” together since I was 5. Finally, what information could I possibly share about my new employer TechTarget? I just met them.
To the “insider” that posted using my name. I hope you were trying to be funny and not malicious. Either way you should be proud of your existence.
JB