WebSideStory Acquires Atomz

Web analytics provider WebSideStory has acquired site search and Web content management provider Atomz for $39 million in cash and stock.

Atomz’ applications will join WebSideStory’s HBX Analytics and a new pay-per-click bid management product in the Active Marketing Suite of products.

“Active marketing” is described by WebSideStory CMO Rand Schulman with an image of a marketer seated in front of an application’s real-time dashboard, driving the marketing organization based on data collected in real time from acquisition, retention and conversion programs.

“They’re going to be able to monitor and measure it in an analytics product, and then take action on it in these other kinds of products that we’re building and have acquired,” Schulman said. In the short term, the actions will be manual. Over time, they will be increasingly automated, he added.

“Imagine conversion information driving search ranking. Imagine that a visitor responding to an ad on a pay-per-click network will make content on your site change,” added Steve Kusmer, Atomz chairman and CEO. “So much is possible by taking the analytics data you have and marrying it with the applications running your Web site.”

Atomz will merge with and into a subsidiary of WebSideStory. Kusmer will stay on as senior VP and GM of the search and content solutions group.

The Active Marketing Suite will have an open architecture accessible through WebSideStory’s STREAM APIs (application programming interfaces), which the company launched in October. The APIs will enable further integration of products, services and data from strategic partners and end users.

Under the terms of the agreement, WebSideStory will issue 3.1 million shares of common stock and options to purchase common stock and will pay approximately $4.3 million in cash in exchange for the outstanding capital stock and options of Atomz. Shareholders of privately-held Atomz will be eligible for a performance-based earn-out payment 15 months after the expected completion of the merger on April 1, 2005.

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