WebSideStory Buys Visual Sciences

Web analytics provider WebSideStory has acquired privately held Visual Sciences, a high-end data analysis and visualization software company, for $57 million.

“Visual Sciences is not a household name, but everyone in the web analytics business knows who they are. They have vaulted onto the scene and won the respect of everyone in our industry with the dynamic segmentation, multi-channel and real-time data visualization capabilities of their flagship Web analytics solution, Visual Site,” Jeff Lunsford, WebSideStory’s chairman and CEO, said in a statement.

Visual Sciences products have been widely acclaimed by those in the Web analytics space. The 40-person company was cited by Forrester Research, along with larger rivals Coremetrics, Omniture, and WebTrends, as best suited for large-site deployments. Their relative unknown status doesn’t correspond with the quality of their products, believes Bryan Eisenberg, co-founder of Future Now and chairman of the Web Analytics Association.

“Visual Sciences has been acting in stealth mode for the past three years, and they by far have the most phenomenal product on the market,” Eisenberg told ClickZ News. “And unlike any other business intelligence tool, theirs is really designed for marketers.”

Visual Sciences products will bring high-end features like multi-channel tracking, to WebSideStory’s HBX platform, which will provide larger clients with an upgrade path once they have outgrown HBX. It also gives WebSideStory a foothold in the coveted government market, where Visual Sciences has several of its 40 existing customers.

“The merger now puts WebSideStory very close to a lead position in terms of reach, capabilities, and in overall value from the lower end all the way to the high end,” Eisenberg said.

The move, along with last year’s acquisition of Atomz, helps further put to rest questions of what the recently launched Google Analytics will mean to their business, according to Jim Sterne, principal at Target Marketing and president of the Web Analytics Association.

“This shows that WebSideStory is moving away from the Web analytics vendor category, and continuing to become more of a marketing analytics company. As a result, we’ll likely see competitors moving quickly to partner with business intelligence companies, because now having these kinds of data analysis capabilities will be a necessity,” Sterne said.

The top four Web analytics vendors — WebSideStory, WebTrends, Omniture and Coremetrics — continue to stay neck-in-neck in terms of visibility and reputation in the marketplace. This move puts WebSideStory ahead, at least for the moment, according to Sterne.

“Visual Sciences really can deliver on the promise of being able to track ROI. Marketers want to know when they’re spending money on advertising, does it turn into profits? Not clicks, sales, or revenue, but profits,” he said.

The transaction, which closed Wednesday, consists of $22.0 million in cash, and shares of stock worth about $35 million today. Visual Sciences will operate as a wholly owned subsidiary of WebSideStory, and co-founders Jim MacIntyre and David Scherer will serve as CEO and CTO of the business unit, respectively.

Visual Sciences also sports two former industry analysts on its team. Eric Peterson, formerly with Jupiter Research, and Bob Chatham, formerly with Forrester Research, both joined Visual Sciences in January. The company intends to keep all employees on board after the merger.

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