More on Google's acquisition of Urchin

March 31, 2005

Google is acquiring web analytics company Urchin Software for an undisclosed amount.

Urchin develops software that tracks web site traffic and analyzes user interactions. The company supports both hosted and in-house deployment options.

Google, which makes most of its money from advertising links in web search results, has a vested interest in analytics technologies that help site owners get a better return on their advertising dollars by tracking conversion rates.

Urchin's software fits the bill nicely, with tools that track the performance of adverts and understand user experiences.

Amid increased competition for "net eyeballs", all the leading internet search engines continue to add new products and features. Earlier this month Microsoft announced it is testing a service where clients pay to be listed alongside MSN search results, to help ramp-up the company's ad revenue.

And in October last year Google bought Keyhole to add a mapping search service.

Google and its arch-rival Yahoo! already both offer its advertisers lightweight tools for basic conversion tracking as a free option.

Both can now offer more robust analysis; Yahoo already owns its own web analytics software acquired from Keylime Software back in 2003.

"[Urchin] will be a valuable addition to Google's suite of advertising and publishing products," said Jonathan Rosenberg, Google's vice president of product management, in a brief statement.

According to Google officials Urchin will to continue to offer tools to site owners and marketers. But the company did not comment on whether pricing would change.

It is however likely that Google will offer some versions of Urchin's products are free add-ons to increase market share. Mountain View, California-based Google has followed this strategy before; as with its Picasa photo management tool.

The deal, which industry observers estimate to be worth around $35m, is expected to close in April.

Founded in 1995, Urchin now claims a million users of its software worldwide. The company moved to a hosted model in October last year. It recently launched an upgrade for its new On Demand application, bulking up online campaign management, segmentation and administration capabilities.

Urchin competes directly with a band of independently-held web analytics ASPs that include WebSideStory, Coremetrics, Omniture and Nedstat.

Earlier this week WebTrends, one of the pioneering vendors of web log analysis technology, returned to private hands once again after its parent company Net IQ agreed to spin it off to equity fund Francisco Partners.

Source: CBR Online

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