Omniture to Acquire Site-Side Behavioral Targeting Firm

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In what it described as an effort to reduce "human interaction -- a limiting factor" in online consumer interactions, Web analytics vendor Omniture yesterday said it is acquiring Touch Clarity, a site personalization firm, for more than $50 million.

Utah-based Omniture said the deal should be completed before the end of the first quarter. In addition to spending up to $51.5 million to acquire the privately held, London-based Touch Clarity, Omniture will spend about $8.5 million for assumed vested stock options, the company said.

The deal should help Omniture's customers automate their site personalization efforts. Touch Clarity uses real-time predictive modeling, data mining and machine learning to track online customer actions, enabling sites to provide content and offers targeted to their demonstrated proclivities.

"What the whole [behavioral targeting] market is designed to do is market to people based on their buying behaviors from previous purchases," said Omniture spokesman Blake Stowell. "If they go to a Web site they've purchased from before, products like Touch Clarity will present certain products to them when they first sign-in to the site."

Omniture co-founder and CEO Josh James said in a statement that most customers today optimize their online offers using Web analytics data, a process "executed primarily by human interaction -- a limiting factor." By combining Touch Clarity's technology with that of Omniture, the company can now offer "online business optimization that delivers automated revenue and profit uplift."

Touch Clarity brings to the table some major clients, including AOL, British Telecom, Lloyds TSB, Barclays and Alliance Leicester, which Omniture has hopes of cross-selling on its other products.

The deal will add more than 50 employees to Omniture's ranks, including 25 product engineering specialists. Most of the newcomers will continue working in London.

Touch Clarity CEO Tim Brown said in a statement the acquisition makes sense because many companies already buy online business optimization services from both Omniture and Touch Clarity. "These technologies are highly complementary and are typically purchased by the same buyer," he said. "In fact, one of our key sales criteria has been whether a company is using a top tier Web analytics provider because the two technologies are required to realize true automation."

Stowell said merging the different-but-complementary expertise of Omniture and Touch Clarity "will make for a pretty nice combination" that blends Omniture's ability to analyze Web site activity with Touch Clarity's ability to analyze Web user preferences.