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Software // Enterprise Applications
03:10 PM
Rick Whiting
Rick Whiting

The Google Effect

The company's move to offer free Web-site analytics may attract businesses and drive down the prices that competitors charge.

The track record is clear: Google Inc. makes a big impact whenever it enters a market or offers a new service. And Google's move last month to offer a free Web-site-analysis service will be no different. By providing entry-level Web analytics, the company may draw small businesses that haven't used analytics before into this market and ultimately expand it.

But Google Analytics, with its relatively limited functionality and focus on the company's AdWords advertising service, is unlikely to appeal to businesses that need sophisticated features such as custom reports and data-import capabilities. "It will go a long way toward educating people about the basic concepts. Then they'll reach the end of their tether and look around for something else," says Chris Grant, senior Web traffic analysis strategist at Enlighten, which provides Web design and development services for companies such as Audi of America, Comerica, and Hunter Douglas.

That may be why longtime vendors of Web-site analysis software and services such as Coremetrics, Omniture, WebSideStory, and WebTrends aren't panicking. "It's a good product, for what it does," says Joe Davis, Coremetrics' president and CEO.

Google entered the market in March when it acquired Urchin Software Corp. and dropped the monthly cost of its hosted Web-analytics service, Urchin On Demand, from $495 to $199. On Nov. 14, Google renamed the service Google Analytics and began offering it free to customers of Google AdWords, the service that lets marketers pay to have their ads appear alongside search results, and anyone else with fewer than 5 million page views per month.

Free Google Analytics proved so popular that a little more than a week after its debut, the company stopped adding new users because the system was at capacity, says Richard Holden, Google's product-management director. He declined to reveal how many users the service has or how long it will take to expand Google Analytics' capacity and reopen the service to new customers.

Chart -- Analytic Advances: Worldwide Web-analytic revenueGoogle Analytics runs on the same infrastructure as the company's search and online marketing businesses. Google handles the integration between the service and customers' Web pages linked to AdWord campaigns, collects data for analysis, and provides a set of standard reports and dashboards with such metrics as page visits, product merchandising, visitor segmentation, and conversion funnels--that's the number of Web-site visitors who are converted to buyers. Google also helps customers evaluate the return on investment of their AdWord spending by adding that data into the analysis mix. "We see it as quite comparable to anything that's on the market," Holden says, adding that Google Analytics should appeal to Web publishers and advertisers of all sizes.

One company it appeals to is NLG Inc., a leisure-travel-services company that has been using Google Analytics/Urchin since May to gauge the effectiveness of its advertising spending on Google AdWord and pay-per-click ads on other sites. While NLG technology VP Jamie Cash acknowledges that Google Analytics' capabilities are somewhat limited, "for our needs it's more than sufficient."

Google Analytics was easily deployed across the multiple Web sites the company manages, including and, Cash says, and was flexible enough to incorporate NLG's Web-site visitor-tracking methodology. NLG previously used a combination of proprietary technology and software from WebTrends to monitor Web-site traffic and bookings, but it wasn't sophisticated enough for analyzing some aspects of visitor behavior. And WebTrends "was economically prohibitive, given the volumes [of Web traffic] we were doing," Cash says.

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