Google to Buy Web Analytics Provider

Updated: The search company agrees to buy Urchin Software and plans to expand the analytical tools it offers to advertisers and Web site operators.

Google Inc. took a step into the Web analytics market late on Monday by announcing an agreement to buy Urchin Software Corp.

San Diego-based Urchin sells analytic tools for measuring user experiences, tracking marketing performance and improving content on the Web. Financial terms of the acquisition were not disclosed.

Google announced that it plans to offer the acquired tools to both Web site operators and marketers, but the company did not say whether it will provide the Web analytics feature for free as it has done with tools from many of its past acquisitions.

Urchin sells Web analytics to thousands of popular Web sites, including those run by Fortune 500 enterprises. It offers its tools both as a hosted service and as software. It also sells through Web-hosting providers.

Google will continue to support and service existing Urchin customers, a Google spokesperson said. But he declined to provide details about Googles plans for Urchins products, such as whether it will maintain the current offerings or fold them completely into Google products.

"We want to provide web site owners and marketers with the information they need to optimize their users experience and generate a higher return-on-investment from their advertising spending," said Jonathan Rosenberg, Googles vice president of product management, in a statement. "This technology will be a valuable addition to Googles suite of advertising and publishing products."

With the Urchin purchase, Google will enter a crowded market of Web analytics providers that includes NetIQ Corp.s WebTrends, Omniture Inc., WebSideStory Inc., Coremetrics Inc. and Keynote Systems Inc.

/zimages/2/28571.gifClick here to read reviews of Web analysis products from NetIQ, Omniture and WebSideStory.

Spending on Web analytics services and software is projected to grow about 20 percent a year to reach $931 million by 2009 from $378 million in 2004, according to Jupiter Research, a division of Jupitermedia Corp.

Google generates most of its revenue by selling advertising through its AdWords program. Those ads are sold in an auction model, where advertisers pay based on the number of clicks on sponsored links appearing alongside search results and on Web pages of content partners.

As part of AdWords, Google already provides basic tools for measuring click-through rates and other ad metrics. But it is facing increased competition in the sponsored listings market.

/zimages/2/28571.gifA recent court ruling could mean more legal trouble for Googles AdWords program. Click here to read more.

Microsoft Corp.s MSN division earlier this month announced its plans to begin testing an MSN pay-per-click ad network, which will focus heavily on offering detailed demographic and measurement tools to advertisers.

As far as online publishing, Google owns Blogger, one of the most popular hosted Weblog-publishing tools.

The move into Web analytics also follows Googles growing interest in the underpinnings of the Web. Earlier this year, Google became an accredited registrar of domain names, though officials said it did not plan to directly sell registrations.

Google, of Mountain View, Calif., expects to close its acquisition of Urchin by the end of April.

Urchin, which is a privately held company, lists such customers as NBC, Proctor & Gamble Co. and the National Aeronautics and Space Administration.

Editors Note: This story was updated to include comment from a Google spokesperson and background on the Web analytics market.

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