Google to Buy Analytics Provider

Google plans to acquire Web analytics provider Urchin Software to complement its advertising and publishing products. Financial terms of the deal were not disclosed and Google didn’t elaborate on how it intends to integrate Urchin.

“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,” Jonathan Rosenberg, Google’s VP of product management, said in a statement.

Urchin is a site analytics tool available in both hosted and server-installed versions. Web site owners and marketers use it to better understand user behavior, optimize content and track marketing performance. Many search engine marketers use the Urchin products to monitor their Google and Yahoo SEM campaigns.

Google has not said how the move will affect plans for future versions of Urchin software, but a Google spokesperson said that Urchin customers will continue to receive product support and service on the product. Urchin is used by customers including NBC, Procter & Gamble, NASA, U.S. Army, and several universities. It is also offered to end users through hosting companies like SBC and Affinity.

JupiterResearch analyst Eric Peterson speculates there are several possible scenarios for Google going forward. The first, and most likely route, would be to follow Yahoo’s lead and integrate the Urchin technology into its AdSense tools. (Overture integrated Keylime into its Marketing Console after buying it for $9.5 million in 2003.)

A second option would be to follow the model it uses with Picasa and give away Urchin “as is.” The goal there would be to help make Web sites more effective and improve Google’s own organic search results.

A third option, which Peterson says could strike terror in the hearts of Google competitors, would be for Google to use Urchin technology to create a free, tag-based analytics solution. That move would likely force lower prices from large vendors, and threaten the existence of smaller ones, he said.

Other industry watchers disagree on the potential impact of the acquisition. Jim Sterne, president of the Web Analytics Association and principal of Target Marketing, said that Google has effectively taken a competitor out of the marketplace.

“People who were going to buy a tool to monitor their Google AdWords program are no longer going to be in the market, but on the other hand, higher end tools will now get better data from Google,” Sterne said.

Google anticipates that the acquisition will close before the end of April.