This morning, less than a week after the announced acquisition, Yahoo! decides that Index Tools will be free. So let’s see that’s three large Ad Networks (Google, Microsoft, Yahoo!) that have bought/developed a web analytics tool/service provider and are now offering that tool/service for free.

Obviously these behemoths see value in web analytics but not enough to make it a stand alone business. Instead, it increasingly appears that these ad networks think that it’s important to offer analytics as part of the ad suite in that it either draws in business, makes switching to them easier or makes it harder for advertisers to leave - if your spend AND your analytics are tied up in one ad network it will be harder to make the switch to another.

I’d love to see the folks at Jupiter or Forrester weigh in on this but it seems to me that consolidation is making the web analytics market weak and open to extinction as a stand alone. Either the current trend will continue and web analytics will be subsumed by the advertising market or the BI players will resurge and take over the remaining pieces of the WA providers.

On second thought, it will be both. Ad Networks will offer free, entry to mid-level analytics capability across the spectrum of the market (Individuals –> SMB –> Enterprise) while the BI players will integrate the remaining "Enterprise" level web analytics services into their suites in order to offer comprehensive channel analytics and advanced segmentation and data mining capabilities. Watch out folks, there are sharks in the water.

IMHO

Photo Credit: B. Stabler via a creative commons license