TechTarget Inc (TTGT) 2007 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the TechTarget Fourth Quarter and Year End 2007 Conference Call and Webcast.

My name is Denise and I will be your coordinator for today.

At this time, all participants are in a listen-only mode.

We will be facilitating a question and answer session toward the end of today's conference.

(OPERATOR INSTRUCTIONS)

As a reminder, this call is being recorded for replay purposes.

Before the call begins, I would like to remind everyone that during the course of this conference call, TechTarget will make certain statements that may be considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including particularly its guidance as to future financial results.

Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

These risks include market acceptance of its products and services, relationship with customers, strategic partners, and its employees, difficulties in integrating acquired businesses, and changes in economic or regulatory conditions, or other trends affecting the Internet, Internet advertising and information technology industries.

For a description of other risks, the Company encourages you to read the section entitled Risk Factors and its registration statement on Form S-1, as well as subsequent filings that it has made with the Securities and Exchange Commission.

In addition, its forward-looking statements speak only as of the date of this call, and the Company undertakes no obligation to update these forward-looking statements.

TechTarget's policy regarding financial guidance is as following.

As part of the quarterly earnings call for the quarters Q1 through Q3, it will provide guidance for then current quarter in which the call is occurring.

As part of the Q4 and year-end earnings conference call, the Company will provide guidance for both Q1, as well as the full year.

The Company does not intend to update full-year guidance on a quarterly basis or quarterly guidance, until the next scheduled earnings conference call.

The following members of management will be participating in today's call; Greg Strakosch, CEO, Chairman, and Co-Founder; Don Hawk, President and Co-Founder; and Eric Sockol, Chief Financial Officer and Treasurer.

I will now turn the call over to Greg Strakosch.

Please proceed, sir.

Good afternoon, everyone.

I understand the wire service is having some technical difficulties with the press release.

The press release is posted on our website, techtarget.com.

I am pleased to report strong growth, both on the top and bottom line for 2007 in Q4.

The new public company, I am also pleased that for the third quarter in a row, our financial results have been within the guidance range that we have set.

I am very excited what our team accomplished this quarter.

We hit our numbers, we acquired our main competitor, KnowledgeStorm.

We integrated their product line into ours.

We integrated the sales teams.

We cut their expense base roughly in half by reducing expenses $8 million on an annual basis.

Since our last call, we have launched five new websites, and as you can see from the guidance in our press release, we are very bullish on 2008 as we are expecting online growth to be approximately 40%.

Obviously, the major focus during the quarter was the acquisition of KnowledgeStorm.

KnowledgeStorm is a business that we have close to and interested in acquiring for at least five years.

KnowledgeStorm was the number two pure play online lead generation business in the IT space after TechTarget.

Combining number one and number two, allows us to expand our competitive lead and further scale our business, specifically in regards to traffic and number of advertisers.

Our combined traffic totals are approximately 15 million visitors per month and 6 million registered members.

We also welcome several hundred new advertisers into the fold, who will have the opportunity to upsell.

While TechTarget and KnowledgeStorm both specialize in providing leads to IT advertisers, we went about serving this need in two very different ways that makes the product integration especially compelling.

KnowledgeStorm generates most of its leads through pull marketing, with a heavy emphasize on SEO and SEM.

TechTarget generated most of its leads through opt-in push marketing.

Putting the best pull offering and the best push offering in the market together, offers advertisers a large platform to deliver superior ROI.

From a product perspective, we completely integrated the offering.

When a customer buys a white paper program from us, the white paper is listed on TechTarget, Bitpipe, and KnowledgeStorm.

You can't buy any of these properties separately.

Don Hawk will provide more detail on this later in the call.

A big part of our financial strategy behind this deal was we knew we could significantly reduce expenses by taking advantage of cost synergies, and sharply focusing on the core opportunity.

We plan on discontinuing some non-core KnowledgeStorm products, which contributed revenue to KnowledgeStorm in part years.

Also KnowledgeStorm had a lot of sales resources against accounts that spent less than $10,000 per year.

While we will forego some revenue, it is most scalable and more profitable to focus our sales team on bigger opportunities in our core market.

We have made good progress integrating the employee base and reducing expenses.

On an annualized basis, we have been able to reduce expenses by almost 50% or $8 million.

At the time of closing in early November, KnowledgeStorm had approximately 115 employees.

By the end of the year, there were approximately 60.

The cuts have come from -- primarily from G&A, finance, and sales and marketing.

There were significant overlap among the two sales teams because we covered much of the same account base.

We are pleased that we are able to retain some of KnowledgeStorm's most productive sales people.

In addition, we have retained essentially the full staff around their core competencies, which are product development, product management, SEO and SEM.

In regard to KnowledgeStorm revenue going forward, it will impossible to break out, because we completely integrated the product lines.

It is also important to understand that most of the KnowledgeStorm contracts were for 90 or 180 days, so most accounts need to be resold.

We are off to a good start.

In mid-December, we launched the new lead generation program called FlexROI that integrates KnowledgeStorm into our product offering.

In the first 60 days, we sold more than 70 of these programs.

Usually, our acquisitions are either folded into an existing group, or we create a new separate group.

This acquisition was more disruptive than usual, because it goes across all groups, all sales people, and there is overlap among our largest accounts.

In addition, the timing was not ideal because it was in the middle of Q4, which is our busiest selling season.

As we anticipated, there were cases where customers paused to digest the news and to reevaluate separate proposals they have from both companies.

Fortunately, we were not surprised by this, because the same thing happened when we acquired Bitpipe in Q4 of 2004, and we worked this into our Q4 guidance, which we were within the range.

As you can see from our 2008 and Q1 guidance, we are past these initial issues, and we have received very positive feedback from our customers about the deal.

They see it as an advantage that our platform is bigger, and they can get access to both the TechTarget and KnowledgeStorm audiences through one company.

To wrap up my thoughts on KnowledgeStorm, we are very happy with where we are so far, we are on track or even a little ahead of schedule on the integration.

Just to refresh your memory, we plan on finishing by the end of Q2 of this year.

Switching subjects, another thing that we are very excited about is our acceleration of new website launches.

We have launched five new sites since our last earnings call, including our first two direct websites outside the U.S.

We plan on launching at least ten new website s in 2008, many of which are launching in the beginning of the year, so this will contribute to organic growth in the second half of 2008, 2009 and beyond.

Don Hawk will discuss these launches in more detail later in the call.

On another topic, I've been getting a lot of questions about the economy and IT market, so I would like to comment on that.

The first thing I will say is that in 2001 and 2002, which was a disaster in the IT space, our revenue CAGR was over 50%.

Of course, that was off a smaller base, but what we saw was a shift from brand marketing to targeted, measurable, ROI-based, online lead generation marketing.

We benefited from that shift.

As you know, the IT audience has shifted to the Web and the Web is the primary vehicle where IT buyers conduct pre-purchase research.

It is a matter of when, not if, the advertising dollars will catch up with the audience.

Many people in the industry believe that a slowdown will accelerate that shift, as marketers come under even more pressure to demonstrate ROI.

What we are generally hearing from our advertisers is that their budgets will be roughly the same as last year, but the mix will continue to shift online.

Our online growth rate in 2007 was 24%, which was much higher than the increase in marketing budgets.

As stated before, we expect our online growth rate to approximately 40% in 2008.

Also, this IT environment feels very different that 2001.

In the years leading up to 2001, the IT market felt frothy as everyone was building out Internet infrastructures.

This market feels much more rational.

IT market growth rates have been in the single digits the past few years, and much of what is driving IT spending is compliance such as Sarbanes-Oxley and HIPAA, and another thing driving IT spending is products that deliver strong ROI, such as data center consolidation and server and storage virtualization.

I believe these types of IT investments will better weather a downturn if there is one.

With that said, I will turn the call over now to our CFO, Eric Sockol, who will discuss our financial results in more detail, and then Don Hawk will give some color on the integration of KnowledgeStorm and our new website launches.

I will come back and share guidance for 2008 and Q1, and then we will take your questions.

Eric?

Thanks, Greg.

Before I discuss the Q4 and 2007 results, I would like to update you on the status of the integration of KnowledgeStorm as it relates to our finance organization.

I am pleased to report that all accounting systems and [finance roles] have been centralized to our finance team in Needham.

The independent audit addressing the purchase price accounting, and all associated SEC filings have been completed.

As Greg mentioned, the integration of KnowledgeStorm was an important Company-wide focus during the quarter, and I am pleased to report that the integration is complete from a finance perspective.

That being said, I would like to share with our Q4 and 2007 results.

We are reporting record revenues for both Q4, as well as 2007.

Our Q4 revenues are $28.4 million, which represents an increase of 23% over Q4 2006.

2007 revenues are $94.7 million, which represents an increase of 20% over 2006.

Our revenue breakout by individual revenue streams are as follows.

Record online revenues of $19 million, which is an increase of 23% over Q4 2006, and represented 67% of total revenues for the quarter.

2007 online revenues increased 24% over 2006, and also represented 67% of total revenues for the year.

Record events revenue of $8 million, which is an increase of 40% over Q4 2006 and represented 28% of total revenues for the quarter.

2007 event revenues increased 23% over 2006, and represented 26% of total revenues for the year.

Print revenues of $1.4 million, which is a decrease of 28% over Q4 2006, and represent only 5% of total revenues for the quarter.

2007 print revenues decreased 17% over 2006, and represented 7% of total revenues for the year.

Our customer concentration and renewal rates remained favorable during the quarter and 2007.

Our top-ten customers represented 23% and 25% of total revenues for the quarter and 2007 respectively.

In both periods, no one advertiser represented more than 5% of total revenue.

Our Q4 quarterly customer renewal rate for our top-100 customers remained favorable at 95%.

Moving on to gross profit, total gross profit margin increased for the quarter, as well as 2007 when compared to comparable prior year periods.

For Q4, total profit margin increased to 73% compared to 71% in Q4 2006.

2007 gross profit margin increased to 70% compared to 69% in 2006.

Regarding our largest revenue stream, online gross profit margin also increased for both the quarter and 2007, when compared to comparable prior year periods.

Our online revenue continued to demonstrate high operating leverage.

For Q4, online gross profit margin increased to 77% compared to 76% in Q4 2006, and 2007 gross profit margin increased to 76% versus 75% in 2006.

Regarding adjusted EBITDA, we're reporting Q4 adjusted EBITDA of $8.4 million, which represents an increase of 13% over Q4 2006.

For 2007, adjusted EBITDA is $24.6 million, which represents a 22% increase over 2006.

Our adjusted EBITDA margin remains strong at 30% and 26% for the quarter and 2007 respectively.

As anticipated, the operations of KnowledgeStorm did not contributed positive adjusted EBITDA during the quarter.

Therefore, our adjusted EBITDA margin was reduced when compared to the prior year quarter.

Moving on to operating expenses, as we have commented in the past, approximately 70% of our operating cost are labor related.

Q4 2007 total operating expenses, excluding deprecation, amortization and stock-based compensation, as a percentage of total revenues was 43% compared to 39% in Q4 2006.

As mentioned earlier, KnowledgeStorm's operations generated a loss and their existing cost structure had significantly less leverage in comparison to ours.

We incurred the majority of these costs for the entire quarter, which is the primary reason for the percentage increase.

Regarding the full-year 2007, operating expenses as defined above, the comparison is similar in that operating expenses was 45% of revenues in 2007 versus 43% in 2006.

Again, the primary reason for the increase is related to the operating expenses associated with KnowledgeStorm operations.

As Greg mentioned earlier, a significant portion of KnowledgeStorm's non-technical labor cost have been eliminated as part of the integration.

Regarding expenses not included in adjusted EBITDA, stock-based compensation was $1.9 million, compared to $1.1 million in Q4 2006, and $5.8 million in 2007, compared to $1.2 million in 2006.

Amortization of intangible assets was $1.8 million, compared to $1.1 million in Q4 2006, and $4.7 million in 2007, compared to $5 million in 2006.

Net income for the quarter is $2.8 million, which is unchanged from Q4 2006.

Net income for 2007 is $8.2 million, which is an increase of 14% over 2006.

Earning per basic and diluted share for the quarter and 2007 were $0.07 and $0.06, and $0.15 and $0.13 respectively, compared to $0.00 for both the fourth quarter of 2006, and a loss of $0.46 for both in 2006.

Before closing, I will comment on our effective tax rate.

Our Q4 '07 and 2007 effective tax rate decreased to 42.5% compared to 54.6% and 51.3% previously reportedly for Q3 '07 and Q2 '07 respectively.

In calculating our 2007 annual income tax provision, we realized that we had erroneously reported more income tax expense than required for certain previously reported periods.

The miscalculation of income tax expense in prior quarters resulted, due to our treatment of certain expenses as permanent tax differences, whereas they should have been treated as temporary tax differences.

To properly allocate the reduction in income tax expense, we will be restating income tax expense for Q2 and Q3 2007.

The restatement results in an increase to net income of $534,000 and $290,000 for Q2 2007 and Q3 2007 respectively.

The restatement is further explained in the Form 8-K which was filed as part of this earnings release.

In closing, our balance sheet and financial position remains strong.

During the quarter, the acquisition of KnowledgeStorm used approximately $52 million of cash, and as of December 31, 2007, our cash and short-term investments totaled $62 million, and our bank debt was $6 million.

This wraps up my review of the financial results.

And at this time, I will turn the call over to Don.

Thanks, Eric.

As you have just heard, we have placed a lot of emphasis since our last call on ensuring that our acquisition of KnowledgeStorm gets off to a strong start.

I would like to walk you through how we have combined the TechTarget and KnowledgeStorm product offerings, in a way that significantly expands our long-term growth opportunities, and how that has driven our initial integration priorities.

Lastly, I would like to go into some greater detail about our aggressive site launch plans for 2008, which was an important growth initiative that I alluded to in last quarter's call.

It's worth reviewing some information from our previous discussion on this acquisition, to provide with the context for why we feel we fundamentally changed the game in our market.

As Greg mentioned, this deal brought together the leading companies for lead generation in enterprise IT in terms of customer base, audience and total number of vendor content assets.

KnowledgeStorm's core competency has been pull marketing, taking its customer's lead generating content assets like white papers, and allowing them to be readily found by technology pros, searching the Web for information.

TechTarget's core competency has been around push marketing, allowing vendors to proactively reach technology pros, with a clearly identified interest in their product or service.

You'll recall that the two companies had low levels of both audience and customer overlap, meaning that our combined footprint is significantly larger than either of us could present to the market separately.

This [size of] footprint issue is key.

In an environment we are both getting found by Web searchers and reaching out to the right potential buyers are of key importance, we don't see another company in our space that can bring to bear the level of sophistication, and most importantly, results that we now provide on both fronts.

The complementary aspects of the companies, have direct implications for decisions that we have made with regard to our lead generation product, as well as our initial integration priorities.

With regard to the product offering, a key decision that we made early on was to combine the reach of the two companies' networks into a single offering sold through a single sales force, as opposed to allowing customers to potentially make decisions about which audience to focus on.

Effective in Q4, our new lead generation offering, known as FlexROI, allows customers to list their content assets on a combined network of over 220 sites, which includes all TechTarget properties, Bitpipe.com, KnowledgeStorm.com and its network of specialized vertical industry sites, as well as our combined network of 39 external syndication partners, including sites like Forbes.com and Businessweek.com.

Because we are realizing substantial SEO and SEM efficiencies when combining our networks, we are able to generate more lead for customers through organic pull based marketing, than either company can produce individually.

As we pointed out in our release today, SEO was already a strong area of emphasis for us in 2007, with over 40% growth in search engine visits in Q4, and our acquisition of KnowledgeStorm just strengthens that capability, and allows us to even better bring it to bear in our product offering.

This increased performance more organic pull based marketing, has the additional benefit of creating more sales opportunity for us with regard to push based email campaigns.

Previously, our offering combined both push and pull based components.

With better performance now on the pull based side, we have actually broken out our offering to create a FlexROI program that is specifically pull based, without requiring any email to support performance.

This allows us to take that email inventory that used to be built into our programs, and now offered for a separate add-on promotional campaigns.

We believe the marketers realize that both push and pull elements are critical to success in any lead gen program.

So, by setting up our offering along these lines, we are increasing our potential revenue opportunity.

We also believe that the overall increased effectiveness of our program, will accelerate our share of the marketing budget that our customers vis-a-vis other marketing alternatives.

Our decision to combine the lead generation product offerings has driven our initial integration priorities.

There are three critical areas in which we have made great progress.

The first has been sales integration.

Unlike most acquisitions we have done, which are specific to individual markets that we serve, KnowledgeStorm overlays every one of our internal media groups.

So, every customer facing group in the Company was affected.

While we did retain some of the best account executives from KnowledgeStorm, we didn't retain a large number of their sales personnel.

So, there is a significant amount of account transitions that we have been working through since the acquisition.

The end result however, is a sales force that can bring to bear the entire range of online product offerings, with the full understanding of our customer's individual markets.

This is important, because many new customers are coming into the pull through this acquisition.

We have a good opportunity to expose these customers to new online offerings such webcast or editorial sponsorships, that were not previously available to them through KnowledgeStorm.

The second area of important progress has been the rollout of the changes that I discussed, with regard to our new FlexROI program, and our separate email promotion offerings.

We have spent a lot of time getting our sales reps up to speed on the aspects of the KnowledgeStorm offering that are being integrated, as well as the new ways in which we will be presenting push and pull marketing elements as a separate component of a program.

This represents a different way of selling for our sales reps, and it's a different way of buying for our customers, but we are already starting to see benefits from this approach.

Lastly, our combined offering has driven an accelerated effort to bring together our operational systems, and we have made tremendous progress on this front.

We made it a very high priority to retain the pull product management and technology staff from KnowledgeStorm, and with their help we have already been able to integrate the Company's registration systems so that registered users of KnowledgeStorm are recognized on TechTarget properties and vice versa.

We have also integrated lead delivery, so that our customers already are receiving their leads through a consolidated lead management system, that brings new capabilities to bear for those that previously only did business with KnowledgeStorm.

Lots of work remains on all of these fronts, which is why we stated that the full impact of the KnowledgeStorm acquisition will be felt in the second half of 2008.

It will take time for our sales reps to get fully up to speed our new accounts and on our new product capabilities.

Customers that are new to us through their relationship with KnowledgeStorm will need time to understand our entire online product suite, and what additional value that we can bring to bear.

And we have scratched the surface of the additional product capabilities we can create, by teaming up our product management and our technical resources.

We still believe that all of these efforts will take us well into the second quarter, but I am pleased with what we have accomplished thus far, and incredibly appreciative of the efforts of our entire organization in making it happen.

While all of this is going on, we are still driving the business toward a multiple fronts.

One of our most important initiatives to support the growth in our online business in 2008 and beyond, is our aggressive site launch effort.

Since our last call, we have launched a number of new sites designed to drive even deeper penetration within existing areas of strength for us.

We are particularly excited about our recent launch of SearchSecurity.co.uk and SearchStorage.co.uk, which were our first two directly operated international launches, and focus our coverage of these key markets on issues specific to the UK audience.

We have also launched SearchVMWare.com, SearchFinancialSecurity.com, and ConstructionSoftwareReview.com, three sites that allow us to get even more granularly focused on specific segments of the markets that have been good growth opportunities for us.

That's a total of five additional sites added to the network since our last call, and there are at least another six in the advanced planning stages that will be moving to launch later this year.

These launches are off to a good start.

Because they are early in their development, the sites won't have material impact on our results in the first half of the year, but we believe that the combined impact of our stepped up site launch activities should contribute to strong top line organic growth in late 2008, and 2009 and beyond.

With that, I will turn it back over to Greg for a discussion of our guidance for Q1 and for 2008, and I look forward to any questions you might have.

Great, thank you, Don.

For 2008, we expect revenues to grow between 25% and 29% and to be between $118 million and $122 million.

We expect adjusted EBITDA to grow 34% and 42% and to be between $33 million and $35 million.

We expect our online growth rate to be approximately 40%.

As we said in the past, we believe that our three to five year online organic growth rate will be greater than 20%.

We expect our 2008 event growth to be approximately 10%, and we expect 2008 print revenues to decline approximately 30%.

In the first quarter of 2008, we expect revenues to be between $23 million and $24 million, and adjusted EBITDA to be between $3 million and $3.8 million.

We now like to open the call up to questions.

(OPERATOR INSTRUCTIONS)

And your first question comes from the line of Jim Friedland from Cowen & Company.

Please proceed.

Hi, thanks.

This is [Kevin Koffman] in for Jim.

Could you tell us if you had any positive or negative surprises in the quarter in particular verticals?

And also, could you give us an update on some of our newer verticals (inaudible) channel are performing?

Thanks.

Sure.

This is Don.

I will take a swing of that.

With regard to kind of surprises up or down, I wouldn't say there are any real surprises.

The areas that we cover within the enterprise IT space, when you look at the areas of particular strength within enterprise IT, they tend to be the areas of strength for us.

Two that I would point to in particular would be our storage media group and our DataCenter Media Group, both of which had very good growth within the quarter.

DataCenter in particular, we have been out in front of that trend with our launch of SearchServerVirtualization, and as I referred to in the call, in the script there, our recent launch of SearchVMWare.

So, we are very well positioned against that market opportunity, it's a hot space.

It's doing very well for us.

I wouldn't point to any particular negative surprises across the board.

We operate a portfolio here.

So, at any point in time, there's stuff that's up and there's stuff that's down, but nothing in particular that I would see any kind of long-term trends in that area.

I think you asked about channel specifically.

We continue to think the channel is a great opportunity for growth for us.

We have gotten good initial traction in that area, and it figures very strongly into our 2008 growth plans.

So, we are pleased with the progress we are making there, and continue to be excited about the opportunity.

Thanks.

And just -- I know it sounds like you haven't seen any broad macro weakness.

But considering all the uncertainty, should we expect less aggressive hiring of sales people, say in '08?

No.

As I said, we are not really getting any feedback from our customers that they are seeing any slowdown in terms of their marketing budgets.

And what they are saying is the dollars they are spending are shifting online, and shifting to ROI focused matters.

So, we plan on aggressively investing in sales and marketing again this year, and to bring on new sales people.

Great, thanks a lot.

And your next question comes from the line of Mark May from Needham and Company.

Please proceed.

Okay, thank you.

First question in terms of the pricing environment, given the economic environment, do you think you will have a harder time increasing revenue per advertiser client, or just the overall rate card in this environment?

And then, second last question is, with the 40% online growth expected this year, and given your calendar year full year guidance, I haven't done the math, but does that suggest that event's revenue growth is less than mid-to-high teens percentage that you have talked about in the past?

Thanks.

Okay, this is Don.

I will take the pricing aspect of that, and I will let Greg speak to the events related question.

So, on the pricing front, no, I don't think it really does represent a weakening in our ability to increase pricing, because particularly given how we are integrating these lead gen product offerings that I discussed, the biggest thing we are looking for out of that integration is even better performance than what we have seen in the past.

Better performance in and of itself is what's going to be able to deliver [you] pricing leverage.

And yes, we are very confident about the performance benefits that we are seeing by this kind of larger footprint that I referred to in the script.

So, I don't really see a weakening in our ability to increase prices in the market, kind of regardless of the macroeconomic environment at this time.

In terms of events, what I said is event growth will be roughly 10% in 2008.

We could grow events faster than that if choose to.

But, what our strategy is is we want to focus most of all primarily on online, and the second thing is we want to maintain high margins.

We have about 65% gross margins on our event business.

So we want to do events very opportunistically, where we can make those types of margins.

So, if we grew events faster, would give us some opportunity cost on online, and it might be at lower margin.

So the strategy is to just do the ones that are very opportunistic and very profitable.

Thank you.

And your next question from Oppenheimer comes from Sandeep Aggarwal.

Please proceed.

Thank you.

Couple of questions.

One is that you mentioned about 95% renewal rate for the top 100 advertisers.

Can you talk about what was the retention rate -- did these renewal happen at the same rate, or did they happen more than 100%?

And secondly, are you assuming similar type of renewal rate for 2008 guidance?

I am sorry, didn't catch the second half of that question.

Does your 2008 guidance assume similar type of renewal rate for the top 100 advertisers?

Yes, I mean in terms of guidance, we don't give guidance on renewal rates.

I will just say, historically our renewal rates have been consistently 90% plus, we don't see any changes there.

What about the -- when you are renewing the customers -- ?

In terms of that, we don't disclose what that -- how that translates into dollars.

So, what we disclose is the percentage of customers that run a program with us in one quarter, that also run a program with us in the next quarter.

Okay.

Can you talk about maybe some any type of -- what kind of traction you are seeing for these two websites launch in the UK, and do you have any plan to launch any other international websites in 2008?

This is Don, I will take that.

So, it's early days on these two UK site launches.

They are very recent launches, but we are pleased with the traction that we are getting thus far with those two site launches.

What's interesting, I think, in the UK market is that we represent a much more targeted alternative than the traditional players that have been servicing that space, it's actually very similar to the experience we saw when we launched TechTarget here in the U.S.

So, those two markets, storage and security, are the markets where we probably have the best kind of leverage and market power to bring to bear, and we are being very well received by advertisers in initial discussions.

Yes, that's probably the best I can tell because like I said, they very recent launches.

With regard to whether or not we will look to do other launches like this, yes, absolutely.

But, what we decided to do here was launch with kind of our two best markets, if you will, as an initial test to this, and based on our experience, we will certainly be opportunistic about looking to do this in other areas.

Thank you.

At this time, we have no further questions in the queue.

I will now turn the call back over to Mr.

Strakosch for closing remarks.

Please proceed.

Great.

One second, sir, I apologize.

We have a question from the line of Doug Anmuth.

Hi there.

This is actually Brian Fenske on the call for Doug.

Quick question, you have mentioned that buying KnowledgeStorm sort of took out a competitor, can you sort of highlight what areas you competed directly with them in?

Thank you.

KnowledgeStorm was online lead generation in the IT space.

So, they were the number one pure play company that just did lead generation online.

So, that's really where we competed.

And I would say in particular, at larger accounts, we would find that they would -- not so much -- when you say competed, it was not so much a mutually exclusive choice, but we will be [divvying our] budget basically with those guys.

So, that obviously goes away with it under single ownership now.

Okay, thank you.

Yes.

Well, thank you for listening in today, and we look forward to speaking with you again next quarter.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Have a great day.