• by Shankar Gupta , May 4, 2005

Google Tuesday cut the price of Urchin, its recently acquired analytics tool, to $199 per month--a drop of about 60 percent from the original $495 per month fee.

Urchin, which the search giant acquired in March, produces analytics software that allows companies to track Web users online and determine what keywords or links brought users to their sites. The analytics tool, dubbed "Urchin On Demand," also offers information such as geo-targeting reports, analyses of users' progression through a site, and e-commerce reports.

The cut-price service also allows buyers to monitor 50 sites at a time, up from the single site allowed by Urchin's old package. The $199 package will report on up to 100,000 page views a month, but can be upgraded to 1.1 million page views for $99 more. Plus, the new Urchin On Demand package allows users to import pay-per-click AdWords campaign data directly to the analytics service.

According to Kelsey Group analyst Greg Sterling, the lower price of the service will make the product more appealing to the 42 percent of American small businesses that maintain a Web site. "Anytime you lower the price of a product, as they did with the mini search appliance, you potentially broaden the available market," he said. "This price drop broadens the market and it is probably targeted at small businesses, because that's who is sensitive to price." In early April, Google dropped the price of its small-and-medium business intranet search appliance, the Google Mini, to $2,995 from $4,995.

This latest move by Google, Sterling said, was in response to a general hunger for data about how campaigns perform, and if advertisers are really getting their money's worth from ads, online or otherwise.

"Online advertising has made everybody who advertises acutely aware of ROI considerations, and people have become much more interested in tracking the value of their marketing spend, and the performance of their campaign," Sterling said. "There's a general appetite for analytic information out there."

What's more, Sterling said, this service offers another source of revenue to fill Google's coffers--something that financial analysts agree is absolutely necessary for the search company, despite its high first-quarter earnings report released late last month. "This is augmenting the analytics that Google is offering, and it's a revenue stream for them," Sterling said. "In the big picture, Google has to diversify its revenue stream, and this is a way to do that."