ONLINE BUSINESS

Analyze This, Says Google

Overnight, the search giant rewrites the rules of Web analytics.
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Google is taking the growing but relatively obscure Web analytics industry by storm. A year ago, the search giant acquired Urchin, a San Diego-based Web analytics company. Google then started giving away Urchin's software for free. So who benefits from Google's generosity? Small businesses, which get a sophisticated tool for free. And who suffers? Small businesses--those that specialize in analytics, that is. Talk about price pressure.

Web analytics software enables businesses to analyze information collected each time a website page is downloaded. The software also tracks the links that draw users to a given page, which helps companies evaluate online advertising spending--hence Google's interest. Demand for Web analytics is growing, and is projected to approach a billion dollars annually by 2010, according to JupiterResearch. When Google made its service free, the company's servers were overwhelmed by new customers, so much so that Google had to suspend new registrations temporarily.

Google has begun accepting new customers again, but some Web analytics companies believe that the exposure the industry has received thanks to Google has more than offset the damage done by the giveaway pricing. John Marshall, CEO of ClickTracks, a Web analytics company based in Santa Cruz, California, says his customers are willing to pay for his analytics package because Google's customer service is "like a black hole." (Google counters that it provides "really good" automated e-mail support for small customers and "amazing support groups" for major clients.)

Even as Marshall exudes confidence, other companies are struggling. At Mach5, an Asheville, North Carolina, firm, revenue from analytics software has dropped by 35 percent since Google got into the industry, says chief manager Mike Landis. To add insult to injury, Mach5 now finds itself buying Google's AdWords to attract more customers for its analytics software.

Three flavors of Web analytics

Google Analytics
Cost: Free
Fairly sophisticated tools for savvy users.

ClickTracks
Cost: $49 to $179 per month
Comes with easy-to-understand reports and a help line.

Coremetrics
Cost: About $2,800 per month to start
Appropriate only for the most complex websites.

Last updated: Apr 1, 2006




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