SPSS Buying NetGenesis

Business intelligence software vendor SPSS gets a foothold in Web-centric data analysis with its $45 million purchase today of struggling Web analytics software developer NetGenesis.

In a fairly unsurprising move, business intelligence software vendor SPSS Inc. today announced plans to snap up struggling Web analytics software developer NetGenesis Inc. in a stock transaction valued at $44.6 million.

The acquisition gives SPSS, best known for its predictive analytics and data mining software, a foothold in Web-centric data analysis, NetGenesis specialty.

It also means that the acronym-clogged world of CRM (customer relationship management) software needs to get ready for a new term: aCRM, for analytical CRM.

The combined companies plan to offer a solution that combines online and offline analytics of business activity with predictive analytics. SPSS, a player in the analytics software space for 30 years, is a relative newcomer to Web analytics. NetGenesis is one of the pioneers of online data analysis, which the company markets as E-Metrics.

Yet NetGenesis, of Cambridge, Mass., has been nearly on life support financially. It managed just $4.3 million in revenues in the second quarter, only $1.9 million of that from license sales. Its total second quarter net loss was $12.6 million, $9.4 million excluding one-time charges. The company is due to report third-quarter earnings on Wednesday.

Chicago-based SPSS, on the other hand is a long-established, stable, profitable company with about four times NetGenesis revenues, though SPSS recently lowered its third quarter earnings outlook.

"We are making investments that enable us to strengthen and develop our core competencies so that we emerge from this economic downturn as a stronger organization," said Jack Noonan, president and CEO of SPSS Inc., in a statement. "Current market conditions are providing us with unique opportunities to accomplish this objective. Our merger with NetGenesis is a perfect example. Where before we could only dream of adding NetGenesis Web-oriented capability to our multi-channel analytical CRM framework, today we are making it a reality."

The acquisition is expected to close at the end of the year