Technology Crossover Ventures and Polaris Venture Partners just pumped $70 million into TechTarget. TechTarget opeates Web sites and a few magazines in the technology space. TechTarget also competes with Jupitermedia (Jupitermedia's JupiterWeb division operates Web sites dealing with IT issues and also runs tech events as does TechTarget).

Based on a story in yesterday's WALL STREET JOURNAL, the $70 million investment gives TechTarget a post money valuation of over $135 million (and most likely the valuation is closer to $200 million since both of these firms invested funds in earlier VC rounds).

TechTarget claims revenues of $50 million and profitability and in the WSJ article forecasts revenues hitting $100 million within three years with profit margins of more than 30%. Very admirable.

A few thoughts from one who has been in the tech magazine, trade show and Web site business for many years:

1. If I owned TechTarget and was profitable and felt growth was unlimited, why would I ever give up so much of the company at this point? Presumably cash flow is great, profits are rolling in and growth is in the bag. Very strange?!

2. As one expands coverage in tech publishing, it becomes increasingly difficult to match earlier growth and profitability. The main reason for this problem is that it becomes increasingly difficult to create areas in which the "revenue opportunities" are easy to grab. For example, we at Jupitermedia are raking in the revenue and profits in the Search Engine arena, but finding another "Search" area is not easy and finding dozens is impossible. Tech publishing online is a great business, but without lots of acquisitions it is very difficult and near impossible to achieve the growth rates that TechTarget is predicting. Twenty percent growth for three consecutive years would be a great victory.

3. I note that Alan Spoon is behind Polaris Venture Partners (one of the VC firms behind this investment). I believe that while at the Washington Post Mr. Spoon lost about $50 million or more betting on CD-ROM at exactly the wrong time. The TechTarget investment could well prove to be brilliant for Mr. Spoon, but I would bet otherwise for the reasons mentioned above.

TechTarget is a great company. The management is first-rate. It will be interesting to see where it all goes. Finally, if TechTarget does hit the projected numbers we will be more than pleased at Jupitermedia as it will mean that our JupiterWeb division will also have sales off all the charts and all the projections that are now public. May the VCs be correct!