Web site analytics and optimization firm Omniture is spending $65 million to acquire Offermatica, a company that sells subscription-based site testing tools.
Company officials said the deal will allow Omniture to offer an integrated product suite that allows customers to easily optimize their sites and then test the effectiveness of the tweaks. Google also offers an analytics product paired with an optimization tool; it refers to these as components of a “three-legged stool” that also includes its flagship AdWords program.
The deal comes on the heels of February’s acquisition by Omniture of site personalization company Touch Clarity. Omniture executives said the products offered by Touch Clarity and Offermatica are highly complementary and are natural fits for an Omniture site optimization suite.
Offermatica, based in San Francisco, has more than 100 clients, including AIG, Circuit City, CNET, ELOAN, Intuit, Monster.com, Polo.com, Skype, T-Mobile and VeriSign.
In a conference call, Omniture co-founder and CEO Josh James said Offermatica’s typical customer spends $100,000 annually on the company’s on-demand A/B and multivariate site tests. “That’s a pretty healthy number,” said James, noting it is similar to the size of Omniture’s average enterprise deal.
Offermatica had about $5.5 million in revenue last year and is on course to more than double that in 2007, said executives during the call.
James said about half of Offermatica’s customers are already Omniture customers. The Offermatica technology has been available to Omniture clients through Omniture’s “Genesis” program, which lets third party vendors integrate with its optimization platform.
James said Omniture customers regularly ask for a recommendation about site testing once they get involved in Web analytics. He said he always liked the way Offermatica’s applications allow site owners to test at the pace they choose.
“When it comes to testing optimization, many customers prefer to crawl before they walk,” he said, for instance by testing a landing page or isolated part of a site without altering every page.
“I’ve often compared Web analytics to turning the lights on and seeing what’s happening on your site and in your online campaigns,” said James. With Site Clarity, Omniture’s customers could determine problems such as “where visitors were getting confused, where they were missing offers or abandoning their shopping carts.”
Omniture will pay $65 million for the outstanding capital stock of Offermatica. At the closing, expected to take place in Q4, Omniture will deliver $35 million in its stock and $30 million in cash. Offermatica’s 70 employees will become employees of Omniture.
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