ITtoolbox, a community-based Web site that has generated a good deal of buzz in b2b media circles, agreed late last month to a $58.9 million buyout offer from the Corporate Executive Board, a business consultancy. The value of the deal could be higher if certain financial thresholds are met by 2010.
The appeal of ITtoolbox is clear. It has 1.5 million unique monthly users and 1.2 million registered members, and it attracts top-shelf business advertisers such as Accenture, AT&T, IBM Corp., Intel Corp., Microsoft Corp. and Oracle.
Dan Morrison, co-founder and CEO of ITtoolbox, would not comment on the specifics of the deal but did explain why the site has become such a popular hub for b2b advertisers. "We have users who are doing granular actions, and marketers have the products that can solve the very problems that users are interacting about," he said.
Repeated calls to the Corporate Executive Board for comment were not returned by presstime.
Morrison cut his teeth as an IT consultant at Ernst & Young, where he familiarized himself with a "knowledge-sharing" system that helped to improve the company's communications and provide a competitive edge.
"The [system] was for thousands of accountants, so imagine what you could do with a similar system on the Internet for millions of professionals," he said.
ITtoolbox, which debuted in 1998, is built on collaboration. It has more than 700 targeted discussion communities on subjects such as business intelligence, CRM and project management, and it generates 100 million emails a month. The site also offers blogs; podcasts; a wiki, including an IT reference guide; knowledge bases; and professional networking. IT professionals can create their own IT home page on the site and post content.
ITtoolbox worked with 170 advertisers last year, Morrison said, adding that the company has worked with a total of 780 advertisers since its debut.
Steve Ennen, VP-digital business strategies for American Business Media, said ITtoolbox could prove to be a template for business media companies that are eager to make their Web 2.0 tools more sophisticated—and bring more potential customers into the fold.
"When people are looking for answers, advertisers can be there almost as soon as the query starts," he said. "[ITtoolbox] is a great example of the type of community that traditional b2b magazines have been doing for 100 years."
Ennen said ITtoolbox would be a boon to Corporate Executive Board's clients, which include 80% of Fortune 500 companies.
"It helps broaden its reach into the digital community and brings the organization a whole new audience," he said. "It will most likely integrate ITtoolbox into its existing [business] networks."
As b2b media companies scramble to include more Web 2.0 tools on their Web sites, ITtoolbox has been decidedly ahead of the curve.
"They were giving the IT community a way of interacting before Web 2.0 was even conceptualized," said Chris Boylan, director of Internet marketing for Information Builders, a software provider that helps companies access and distribute their information.
Since 2003 Information Builders has hosted a rotating collection of white papers on ITtoolbox's Business Intelligence and Integration sections. In the last four years, the company has invested about $75,000 in marketing on ITtoolbox, which has brought in or directly influenced $1.4 million in sales, Boylan said. It currently devotes about 5% of its online marketing budget to the Web site, with another increase likely in 2008, he added.
"It is a community defined by users and is less invasive than editorial-only Web sites," Boylan said. "People feel vested in the content and take on more of an ownership role, and that's what sets it apart.The site draws not just developers but decision-makers about what tools to buy."
ITtoolbox plays a crucial role in serving up the right prospects for CorasWorks Corp., which provides workplace software for Microsoft SharePoint.
"They help us get `cheeks in seats,"' said Kelly White, field marketing manager at CorasWorks, which offers a free, monthly workshop to ITtoolbox's international subscribers. White contacts via email 5,000 prospects a month and receives about a 2% response rate.
"We're getting high-caliber individuals who meet our criterion," she said, adding that while the company is currently budgeting between $3,000 and $5,000 a month for ITtoolbox she expects that amount to increase.
White said the workshops have "generated a tremendous amount of interest in our product, particularly in Sydney [Australia]," which is part of CorasWorks' international push. "The lists are constantly refreshed, which is good because that means I'm touching new people."