Publish2 Gets $2.75 Million. For What, Exactly?

The big news in the blog world today is the $2.75 million in funding received by Publish2, a startup founded by former GigaOM contributors Robert Young and Scott Karp. I wrote about the company quite some time ago and still have not seen a working prototype, a worrisome sign in my book.

One of the reasons the company is getting so much attention is that the funding came from Velocity Interactive Group, the fund that was created out of the ashes of Com Ventures and the Ross Levinsohn-Jon Miller investment vehicle previously known as Velocity. Just because VIG invested in the company doesn’t mean that Publish2 is a slam dunk, however. I have to wonder if Miller-Levinsohn were just itching to do a deal, any deal.

I’m not saying Publish2 is a bad idea. Karp and Young are very smart guys, much smarter than simple scribes like yours truly. But is it a big enough idea to command $2.75 million in Series A funding? Reading various blogs today, you get the sense that this is a Digg-type service for journalists. However great the product might be, that’s a small market — and thanks to the current downturn, it’s only going to get smaller. So while the concept may be sound, I have to wonder about the business potential.