March 31, 2005, 12:00 AM

Google seeks to play in the web analytics market with purchase of Urchin

Google joins the trend to offer a broader range of services for understanding and building online customer relationships by acquiring Urchin Software. But analysts question the deal’s impact on the growing analytics market.

By acquiring Urchin Software Corp., a provider of web site analytics for retailers and other site operators, Google Inc. is joining the trend to offer a broader range of services for understanding and building online customer relationships. Google says Urchin’s site analytics data will let marketers see the effect of their Google search engine marketing campaigns, but analysts question the deal’s impact on the growing analytics market.

“Internet search engines feel a need to provide additional value to their customers, and this is another attempt to do that,” says Bob Chatham, analyst with Forrester Research Inc. But though he says Urchin provides good software and hosted services for analyzing the performance of search engine marketing campaigns, he contends that the Google-Urchin deal, which Google expects to close by the end of April, will bring only limited value to marketers.

“If I’m a marketer, do I want a search engine vendor to give me metrics on how well its keywords are performing? I want one tool to manage all search engines,” Chatham says.

Other web analytics providers were quick to elaborate on that very issue after Google announced its Urchin deal earlier this week. They noted that Google is likely to call more attention to the importance of web analytics, but that marketers will come to realize that they need a more comprehensive analytics tool for monitoring multiple search engine marketing campaigns.

"Google`s foray into the web analytics market further highlights the growth of the market and the importance of making actionable data more accessible to more marketers,” said Josh James, CEO of Omniture Inc. “It is an interesting move that will drive the market`s education by addressing certain aspects of online marketing measurement. This education will accelerate demand for a full, integrated view of online marketing and ROI measurement provided by a comprehensive, on-demand web analytics vendor."

Added Greg Drew, general manager of WebTrends: “Google will expose thousands of more companies to the value of web analytics and many of them will eventually mature to wanting a complete solution like WebTrends.”

Chatham notes that the web analytics market is expected to grow 30% this year.

Urchin offers its analytics software both as a licensed and hosted application. Google is not yet commenting on how it will price Urchin’s offerings, a spokesman says. It did not disclose terms of its agreement to acquire Urchin.

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