Web Analytics Industry – Consolidation Continues

Last month I wrote about ZeroDash1 and IndexTools getting into partnership. Few days later we (ZeroDash1) were acquired by Ascentium, a marketing an technology company based in Bellevue, WA.

Now IndexTool has been acquired by Yahoo.

“Yahoo! believes that the ability to generate the most valuable and relevant insights is essential to seizing market opportunities and creating successful campaigns,” said Bassel Ojjeh “We expect that the IndexTools’ technology platform will provide our customers the opportunity to more quickly uncover and act on these insights, enhancing Yahoo!’s status as a partner of choice in online marketing and the must buy for the world’s advertisers.”

I am not sure if IndexTools will continue to offer its tool for a fee (as it is today) or become a free webanalytics tool like Google Analytics. I think that Yahoo will take the route of Google Analytics and Microsoft Gatineau and make it a free tool. IndexTool is, however, a better tool in terms of functionality it offers compared to Google and Microsoft’s tool.

A free offering from Yahoo will change the Web Analytics landscape. If yahoo is smart they will make index tool available for free as soon as possible. I will replace GA with IndexTool in a heartbeat (as I don’t tie my Adwords to GA).

So what’s next?

Here are few scenarios

Scenario 1

  1. Google Analytics, Microsoft Analytics (and some other tools) will not be able to compete with IndexTools free offering.
  2. Microsoft will need to step up its offering quite a bit (considering the deal with Yahoo is not happening), they should buy WebTrends. Webtrends is built on MS technology and provides far more functionality than IndexTools (Let’s call it Yahoo Analytics). Which will make Microsoft the leader, Yahoo second and Google third in web analytics capability.
  3. Now, Google won’t stand still. They will use their stock power to buy Omniture and replace Google Analytics with Omniture.
  4. Which will make Google the leader once again, Microsoft second and Yahoo Third
  5. Microsoft then buys Yahoo and it will be down to two Google and Microsoft. We won’t have one clear leader as both will be close.

Scenario 2

  1. Google Analytics, Microsoft Analytics (and some other tools) will not be able to compete with IndexTools free offering.
  2. Considering Microsoft’s intent to buy Yahoo, Google will spring into action and buy Webtrends and Omniture.
  3. Which will make Google the leader once again, Microsoft second and Yahoo Third
  4. Microsoft then buys Yahoo and it will be down to two Google and Microsoft. We won’t have one clear leader as both will be close.

Scenario 3:

  1. Google Analytics, Microsoft Analytics (and some other tools) will not be able to compete with IndexTools free offering.
  2. Microsoft will need to step up its offering quite a bit (considering the deal with Yahoo is not happening), they should buy WebTrends. Webtrends is built on MS technology and provides far more functionality than IndexTools (Let’s call it Yahoo Analytics). Which will make Microsoft the leader, Yahoo second and Google third in web analytics capability.
  3. Oracle, which is on the sidelines but one Web analytics company recently, jumps into action and buys Omniture and makes it free.
  4. Which will make Oracle the leader once again, Microsoft second and Yahoo Third and Google the fourth.
  5. Microsoft then buys Yahoo and it will be down to three Oracle, Microsoft and Google.

Some other combinations of the above are also possible. Also, there is a possibility of AOL and some agencies getting into the action but you get the idea that the consolidation will continue.

If any one of the above scenarios happen then Ian Thomas will be proven right, when he said in 5 years web analytics will be everywhere and all web analytics software will be free. I disagreed with Ian in my response to his prediction, but I also did not deny the possibility of web analytics vendor aggregating the user data across sites and then using that to provide targeted advertising and in return providing the tool for free.

What do you think? Comments?

Side Note: The interesting thing is that IndexTool will become part of Yahoo!’s Strategic Data Solutions. Bassel was one of the co-founders of my ex-company digiMine (which is now called Revenue Science).

One Reply to “Web Analytics Industry – Consolidation Continues”

  1. You’re scenario’s are all under the assumption that Yahoo does the “free thing”. However, based on their actions with Yahoo music (annoying ads every 5 seconds telling you to buy the paid version… such a turnoff. Thank god for pandora and last.fm), they don’t always seem to like the “free model”. They already have a bloggers basic analytics tool in mybloglog. Since they’ve bought it up, they haven’t made the upgraded version free.

    It would be a smart play for sure, but I also don’t think that any company wants to make enterprise analytics free. Indextools already majorly undercuts omniture, and webtrends and the rest of the $1,000+ solutions. So Yahoo will have even less motivation to make the tool free. (If they would tie it to their YSM platform, where you get a credit on your indextools account based on how much you are spending, they might be able to raise the marketplace bid prices and revenue though).

    I’m not sure if Google will make an enterprise tool free. There is alot of support needed. I’ve worked with webtrends – and it’s a freakin’ pain. I haven’t worked with Omniture though. I don’t know if Microsoft would even do it (they also like enterprise software. Their whole model is based on charging money for software. They like that.), even though they are going to do anything that Google does, just to show they are serious (even though their implementation process is not as smooth).

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