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NetIQ is selling WebTrends, one of the older and more popular web analytics applications, to a SF-based private equity fund for $94 million in cash. This surprised me, since NetIQ acquired WebTrends in 2001. Then again, their 5-year stock chart doesn’t look so good.

But far more interesting is Google’s acquisition of Urchin, one of the well-known low-cost web analytics solutions. The price was reportedly $30 million. I haven’t used Urchin for a few years. I helped a client switch from Urchin to SiteCatalyst, a far better commerce-oriented web analytics solution. But in September 2004 Urchin launched a hosted solution in version 6, which represents a major step forward.

  • Wall Street Journal report (subscribers only)
  • The Urchin.com web site claims its software is used by more than one million sites worldwide, including 20% of the Fortune 500.

    What will Google do with Urchin? They can beef up their analytics services for their 300,000+ AdWords advertisers most of whom probably have no good analytics solution today.

    But will they also use Urchin (with its installed base of one million sites) to move into other forms of internet marketing, including email marketing and affiliate marketing?

    According to the September 2004 press release, "Urchin 6 accurately links conversions to specific email campaigns, ads, organic and paid keywords, affiliate programs, and any other type of online campaign. Organizations investing in search engine optimization (SEO), paid search, email blasts, and online advertising will find Urchin 6 indispensable."

    IDC predicts analytics will represent an $11.8 billion market by 2008. How much of that will Google be able to capture? I wonder how much Google’s stock price will jump tomorrow on this news. (Note: I do not currently own any Google stock.)

    In 2001 San Diego-based Quantified Systems (developer of Urchin) had 40 employees. They did a deal with the world’s leading web hosting company Verio, to make Urchin available to their customers. A news article then said, "Verio has told its resellers that Urchin’s retail price is $495, but it’s free on its virtual private servers. Doug Schneider, president of Verio’s small and medium enterprise hosting, said Urchin’s multilingual capability, its e-commerce reporting features and its scalability all make it an attractive addition to his company’s services."

    I am reminded that one of my readers predicted last year that Google will extend its reach by getting into web hosting. Now, if Google decides to offer hosting services (since massive low-cost storage is one of their core technology advantages over most everyone else) they can add web analytics to it. They could offer both free hosting and free analytics to everyone who incorporates their search engine on their site. I’m not sure they will go this direction, but in any case, Google now represents a potentially disruptive force in the web analytics industry.

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    1 Response

    1. Paul,

      I had a conversation with Urchin last month and they, at that time, had plans to push their new version to compete with Omniture’s conversion tracking features.

      I think Google understands that in order to offer a solid advertising service they need a solid analytics service.

      According to the release on Urchin’s site this is exactly what Google plans to do:

      “Google plans to make these tools available to web site owners and marketers to better enable them to increase their advertising return on investment and make their web sites more effective.”

      From what I was told by Urchin’s busdev department, version 6 does what Overture does for less.

      What will happen now that Google has it? I think Google will use it to increase it’s USP over its PPC competitors.

      P.S. Let me know if I will see you at the eBusiness Advisory Board meetings.

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