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May 05, 2006

Microsoft buys DeepMetrix

In a move that should generate no surprise whatsoever, Microsoft has announced that it is acquiring DeepMetrix, a Canadian web analytics firm. It's an obvious (and sensible) move to counter the activities of Google, whose own product, Google Analytics, is a useful adjunct to Google Adwords  - as well as having caused the biggest shake-down of the web analytics industry by being made available free of charge.

Funnily enough, although MS is obviously not first to market with this kind of offering, I think there are a number of benefits from being second in this case:

1. The launch of Google Analytics for free probably depressed the value of DeepMetrix (though MS's deep pockets were probably not much troubled by the purchase price)

2. Google's much-publicised cock-up of the launch of Google Analytics provides useful lessons in managing capacity (and expectation) amongst potential users

3. The web analytics market's moved on a lot in the past 18 months, with outfits like Omniture, Webtrends and WebSideStory really making a strategic move into online marketing management. MS may be in a better position to square the circle of working closely with these folks as partners (since their products will want to be able to deploy and track ad response on AdCenter) whilst simultaneously launching a (somewhat) competitive product into the market.

[Above post edited 6/13/06 to correct mistakes pointed out in comments below]

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