Friday July 13, 7:00 pm ET
J. Bonasia, Yahoo Finance
The sector remains small, but it is one of the few bright spots in business software.
Market leader Omniture has seen its stock more than triple since it went public a year ago, to near 24. Shares of rival Visual Sciences have risen about 35% since its February 2006 merger with WebSideStory. On Thursday, Visual Sciences said it "has been approached by a number of strategic buyers" in recent weeks, unsolicited, and it has hired Goldman Sachs as a financial adviser.
The sector is rising along with the rapid growth of online ads and online shopping. Companies use Web analytics software to track how their Web sites are performing, and to sell more stuff on the sites.
"Not using Web analytics is essentially like flying an airplane without using an instrument panel," said Josh James, CEO of Omniture. "Once our customers get the instrument panel, they never give it up."
He says Omniture's client renewal rate is more than 95%.
The goal with Web analytics is to improve online sales by analyzing the click paths of Web site visitors, helping to gauge the strength of Web site designs and online marketing campaigns.
But that initial goal is being extended. Companies want all the data they collect from call centers, physical stores and e-mails to be integrated with online sales data, and to be quickly and easily available to managers and sales personnel.
Integrating all this data from so many sources for easy access is a complex problem, says Megan Burns, a Forrester Research analyst. As vendors do this, sales of Web analytics software and related services should soar, Burns says.
"One of the most significant opportunities for vendors involves (customer) education," she said. "So few people understand their Web data or how to use it effectively."
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