Google is to acquired the Urchin web analytics firm, which provides both hosted and log-based tools for understanding how people are interacting with web sites.
The Google press release notes that the company plans to continue offering the tools to site owners and marketers, though it doesn't say whether pricing would change. I imagine that Google might offer some versions completely free, in order to build greater marketshare. The company has done the same with many of its other products, such as with the Picasa photo management tool.
One reason to jump into web analytics is that the search companies understand that as search ad prices rise, people will only be willing to pay more if they can justify this by showing better conversions. Web analytics can help those who aren't tracking conversions or who are tracking conversions at only a basic level to better understand the full picture of what happens on their web sites. For more on this, see my Most Conversions Happen Offline; You Need To Measure These! post.
This is one reason why both Yahoo and Google already offer free conversion tracking tools to their advertisers (Yahoo info here; Google info here, though the link to the page with more info on the tool has disappeared). Providing full web analytics may help companies improve conversion even more. Yahoo already owns web analytics technology that it obtained through its 2003 purchase of Keylime. Now Google joins the club.
Want to discuss? Please join our forum thread, Google Buys Urchin.
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