Formerly known as Urchin from Google, the hosted service is based on technology from Web analytics company Urchin Software Corp., which Google acquired in March. The service provides information such as which keywords attract the most visitors, which e-mail campaigns generate the most customers and how to design Web pages that hold users' attention.
Google previously charged $199 for the service. Analysts and search marketing experts had differing opinions on whether the free service would pose a threat to existing Web analytics vendors, such as Omniture, Visual Sciences, WebSideStory and WebTrends, all of which offer search analytics as part of their software packages.
Eric Peterson, senior analyst at Jupiter Research, said, "We think it means some level of threat to the analytics vendors' businesses."
Jupiter Research estimated the size of the Web analytics market will reach $463 million this year and $565 million in 2006.
Less functionality, better price
Peterson said that while Google Analytics doesn't have all the functionality and customer support of leading analytics products, it has an advantage over rivals because it's free.
"I'm starting to see companies that are paying for one vendor's services that have installed Google code on their pages," Peterson said. "If companies are spending between $5,000 and $15,000 annually for analytics services, and if they are finding that Google Analytics provides most of the functionality and is free, it does pose a threat."
Demand was so high for the free service that Google had to stop taking orders, according to a statement on the sign-up page (www.google.com/ analytics/sign_up.html).
Google would not disclose how many businesses have signed up for the service so far, and said it hopes to begin taking new sign-ups soon.
"It's going to have a huge impact. The threat to analytics vendors is real," said Bill Furlong, president of SearchChannel, which builds custom search engines for publishers. But Furlong added that many vendors have analytics products that go far beyond the basic analytics services provided by Google.
"We don't see it as a competitive threat at all. Their free offering will see adoption in the small-business arena," said Brent Hieggelke, VP-corporate marketing at WebTrends. "WebTrends is focused on highly scalable, comprehensive solutions that can be customized for large, complex organizations."
WebTrends was the first analytics company to differentiate between paid search and organic search, Hieggelke said. In 2003, WebTrends acquired WebPosition, a search engine optimization technology company, and it offers a separate product for improving natural search rankings.
Gail Ennis, VP-marketing at Omniture, said Google's move will be good for the Web analytics industry overall.
"It may stimulate the market we're in," Ennis said. "Now, Web analytics has really entered the executive conversation. They are asking, `What is Web analytics and do we need it?' "
Ennis said Google's service does not pose a competitive threat to Omniture because Google's product is entry-level, aimed at small businesses, while Omniture offers enterprise solutions.
This month, Omniture released SearchCenter 2.0, an upgraded search analytics product that allows marketers to optimize keyword campaigns based on visitor behavior and results in real time. It integrates with more than 40 search engines, including Google, MSN and Yahoo! It also integrates with Omniture's SiteCatalyst Web analytics platform. It is priced starting at $500 a month.
Barbara Coll, CEO of Webmama.com, a search marketing agency, said one concern about Google Analytics is security.
"If you're going to use this product, you need to make sure you don't put financial information about your company up there, since it is an open, Web-based system," she said.
Search analytic systems from Omniture, WebTrends and Visual Science are more secure because the software is housed at the marketer's location, she said.
Another concern, voiced in multiple discussion threads following the Google announcement, was that the company planned to monitor Google Analytics data, trends and details, which would give it access to raw data on the needs of advertisers—specifically, giving them an understanding of how much advertisers might pay for keywords and ads.
In response to these concerns, Google issued the following statement: "Google takes data privacy very seriously. Google Analytics reporting data is only available to the individual advertisers or Web sites using the service, or in specific circumstances, customer support and client service. Google is not aggregating this data or using this data for other purposes."
Google Analytics users without a Google AdWords account are limited to 5 million page views per month. Google said it planned to roll out dashboards aimed at different types of users, such as Webmasters and advertisers.