WebSideStory Completes IPO

WebSideStory began trading today on the NASDAQ. Symbol is WSSI. This company has wanted to IPO for nearly 4 years. Last year it had revenues of more than $16.3 million and losses of just under $2 million. It turned profitable in the first six months of this year. The stock is trading above $9, up from its opening price of $8.50. They apparently sold 5 million shares in the IPO. My rough research shows about 15 million outstanding shares, giving this company a market cap of $135 million.

WebSideStory’s competitors include Coremetrics and Omniture. Coremetrics (Austin, TX) got a new CEO in March 2004 and had 60 employees at that time. Websidestory reported in its S-1 that it had 120 employees as of June 30, 2004. Omniture has the strongest story by far of the three companies–with faster revenue growth and more marquis customers, including eBay and AOL.

The largest company in this space may be NetIQ, which acquired WebTrends in 2001. NetIQ had revenue of $68 million in the quarter ended June 30, 2004 and a narrowing loss of about $7 million, but it offers many more services than just web analytics. It’s hard to tell how much of its revenue comes from WebTrends. The company had more than 1,200 employees in mid 2002.

Every serious internet business must use powerful web analytics services. Web developers and marketers rely on these tools to determine how many visitors your site has, where they are coming from, the ROI of marketing campaigns, what products are selling, what paths customers take before purchasing, and how site design changes impact revenue. There are free and cheap web stats packages everywhere, but once you’ve used a high-end package, you realize they are the key to eliminating guess work from your marketing and design decisions and turning your web site into an optimized revenue generating machine.

Many of our (Infobase Ventures) companies use Omniture SiteCatalyst.

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