Google's dominance of the web analytics market

Posted by Matthias Gelbmann on 10 December 2009 in Google Analytics, Traffic Analysis Tools

Our survey on web traffic analysis tools shows that Google Analytics has a more dominant position in that market than it has in the search market.

It was certainly a smart move by Google in 2005 to buy Urchin, one of the leading web analytics providers in those days. Since Google started to offer the tool for free and to keep improving it, competitors found themselves in their worst case scenario.

Google said in its press release, Google Analytics is "a valuable addition to Google's suite of advertising and publishing products." They don't say why it is valuable, but that is quite obvious. Their cash cow, Google Adwords, depends on offering advertisers good options to target the audience. Google has many ways to collect the required data, but we can assume that Google Analytics is a very significant part of that strategy.

Google's dominance in that sector raises at least two questions.

The first question is, whether it is good when a free product dominates a market (if you can still call it a market then). This has been discussed many times on similar occasions, e.g. when Microsoft offered a free browser and a free media player, but Google largely gets away with it so far.

The second point are privacy concerns. It is very difficult today to surf the web for a while without accessing a Google server. Even if you don't use Google search, and even if you don't have a Google account for services such as Gmail, Google Calendar or Google Docs, then it is still very likely that some of the web sites you visit use Google services such as Analytics, Adsense or Google Maps. People have quite different positions when it comes to privacy. Some people in the EU would like to ban Google Analytics, while the Canadian Information and Privacy Commissioner seems to be an example of the "take it easy" side of the argument, as his own website uses Google Anaytics.

Whatever your opinion on that issue is, it will be interesting to monitor that analytics survey, to see whether this dominance evolves into a monopoly or into a more competitive market.

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