Web analytics market heats up

All eyes are on the Web analytics market as Google plans to acquire Urchin Software, and WebTrends parts ways with NetIQ.

Web analytics, a crowded and varied software market, got a heavy dose of attention Monday night when, in the span of less than eight hours, search engine giant Google Inc. announced plans to acquire Urchin Software Corp., and a private equity firm bought WebTrends.

Mountain View, Calif.-based Google Inc. announced late Monday night an agreement to purchase San Diego-based Urchin. Terms of the deal were not disclosed. It is expected to close by the end of April.

Google said in a statement that it will provide Urchin's technology to Web site owners and marketers to enable them to improve advertising ROI and make their sites more effective. Urchin's technology analyzes Web site traffic and performance.

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"Urchin is a company that's been around a long time, but at the relatively low end of the market," said Bill Gassman, principal analyst with Stamford, Conn.-based Gartner Inc. "They've added business functions and we're starting to see them on the short lists of people comparing them to WebTrends. I'm not sure what Google's doing with them. It's sort of a shame to see them taken out of the market."

Meanwhile, Francisco Partners, a technology-focused private equity fund, purchased WebTrends, a business unit of San Jose, Calif.-based NetIQ Corp. The NetIQ board of directors has approved the transaction and it is expected to close before June 30. Terms of the deal were not released.

"I don't know if it's coincidence or not," Gassman said. "I think it's a completely different type of announcement. They [WebTrends] have been trying to get away from NetIQ for some time."

WebTrends was a private firm until it was bought by NetIQ about four years ago. Becoming a private company once again will allow WebTrends to focus on development and gaining competitive advantage instead of worrying about quarterly profits, Gassman added.

Monday's announcements could be the harbinger of more movement in Web analytics.

"There are more than 60 vendors in this market but there's been very little consolidation," Gassman said. "The BI [business intelligence] and CRM vendors have pretty much been ignoring it. Leading Web analytics vendors are starting to say maybe we can be the center, the kernel on which other things grow."

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