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Google Analytics: free forever & for always?
shorebreak




msg:3894738
 4:49 pm on Apr 17, 2009 (gmt 0)

On Google's earnings call yesterday executives there mentioned that they've killed several business in the past 3-6 months that were not deemed viable or too costly, and also made it clear that other low/no revenue products might be on the chopping block as well.

That got me to thinking: given the current economic climate and Google's clear desire to - and success in - improving earnings per share despite flattish revenues, is it not distinctly within the realm of possibility that Google make G.A. something less than free, either as a whole or for higher-volume users?

IMHO, the days of G.A. as a 100% free product may well come to an end in 2009 or 2010.

Anyone else have any thoughts?

 

Lord Majestic




msg:3894745
 4:59 pm on Apr 17, 2009 (gmt 0)

It's unlikely they kill it - the main cost was buying that business and who knows what huge commercial advantage Google gets by being able to aggregate those figures? They won't kill it - no chance.

bateman_ap




msg:3894751
 5:08 pm on Apr 17, 2009 (gmt 0)

I am not sure if it is the case but do you have to have a Adwords account to use GA? If so then i suppose it could be dependent on a usage of Adwords to keep it going?

shorebreak




msg:3894775
 5:52 pm on Apr 17, 2009 (gmt 0)

It's unlikely they kill it - the main cost was buying that business and who knows what huge commercial advantage Google gets by being able to aggregate those figures? They won't kill it - no chance.

No way. I'd be very surprised if the main cost today wasn't the tens of thousands of servers G.A runs on, and the bandwidth consumed; Google's efficient, but not miraculous. I'll bet that expense is $250M/year or thereabouts. If there are 50K G.A. deployments, that works out to $5K/year/instance. Google probably knows there are relatively high switching costs, so forced to decide between paying for G.A. going forward and moving to another vendor, the majority (although by no means all) would stay & pay.

Also, think about this: Google very much views itself as a technology company: GMail, Google's office suite, Android, etc, all are technology solutions. Granted, many of them are monetized with advertising, but clearly G.A. is not a fit with an advertising model.

The question you have to ultimately ask is, does Google benefit significantly more from G.A. being free than it costs them? If it does (and in which case it could remain free), what are those benefits? If you believe Google's not evil (and I do), then charging for G.A. given flat topline growth is a distinct near-term (1-2 years) possibility.

Digmen1




msg:3894946
 10:19 pm on Apr 17, 2009 (gmt 0)

I am not sure if it is the case but do you have to have a Adwords account to use GA? If so then i suppose it could be dependent on a usage of Adwords to keep it going?

Two questions

How do you put a box around quotes on this forum ? (most other forums have a "quote" feature.

I have also thought about that question.

Eg I am using Adwords with not much success and may dump it but like Analytics. I cannot see any way to access Analytics without going to my Adwords account.

[edited by: Digmen1 at 10:20 pm (utc) on April 17, 2009]

willybfriendly




msg:3894954
 10:32 pm on Apr 17, 2009 (gmt 0)

The question you have to ultimately ask is, does Google benefit significantly more from G.A. being free than it costs them? If it does (and in which case it could remain free), what are those benefits? If you believe Google's not evil (and I do), then charging for G.A. given flat topline growth is a distinct near-term (1-2 years) possibility.

Access to the kind of detailed info available via users of G Analytics is invaluable. It is one of the things that makes G scary powerful.

They would be fools to lose that info - and they will if they require payment.

How do you put a box around quotes on this forum ? (most other forums have a "quote" feature.

You have to enter the bbcode by hand. [ quote ] ...blurb... [ / quote ] (take out the spaces, and there is a link somewhere to other code you can use).

Lord Majestic




msg:3895000
 12:20 am on Apr 18, 2009 (gmt 0)

I'll bet that expense is $250M/year or thereabouts

YouTube may cost Google so much however Google Analytics (or Urchin as it used to be called before Google bought them) should use fraction of resources Google already has to pay for - when you buy bandwidth on their scale you get plenty of redundant capacity that can be put to good use.

It may cost them $10 mln to run it every year, however the knowledge they gain about real ecommerce sites is literally priceless - knowing such things can help them make smarter (for them) PPC auctions to make far more money.

Digmen1




msg:3895005
 12:30 am on Apr 18, 2009 (gmt 0)

yeah, why did Google pay so much for youtube ?

And how can they make money from it ?

I don't see many ads

And it must cost heaps in bandwidth and storage.

Lord Majestic




msg:3895032
 1:43 am on Apr 18, 2009 (gmt 0)

yeah, why did Google pay so much for youtube ?

It's popularity thing - they bought it because otherwise someone else would and they would lose share of "eyeballs".

shorebreak




msg:3902689
 8:16 pm on Apr 28, 2009 (gmt 0)

It may cost them $10 mln to run it every year

FWIW, I think you're off by 1-2 orders of magnitude, based on what other analytics vendors spend on infrastructure and even accounting for Google's extreme scale and efficiency. If all non-Google analytics vendors make ~$500M in annual revenue, if only 1/5th of that goes to server infrastructure, if GA is 5X bigger and if Google is 3X more efficient, then that's still $165M in cost to Google of operating GA. Moreover, I'll bet GA is much less than 3X more efficient, if for no other reason than their clients have no incentive to be efficient in their use of GA.

I'll say it again - in this economy and with its first-ever flattish growth, you can't count out Google charging for GA at some point.

bakedjake




msg:3902698
 8:29 pm on Apr 28, 2009 (gmt 0)

then that's still $165M in cost to Google of operating GA

Assuming they're not simply using excess capacity they already have. While I don't think the cost is zero, I doubt their costs of providing the service are as high as you suspect. I would guess they're in the neighborhood of 5X-10X more efficient than other analytics vendors, simply because Google has lots and lots of expertise in delivering high availability, distributed services and 99% of what is required in delivering an analytics solution is likely already within their core competencies.

you can't count out Google charging for GA at some point

Agreed. This will come from street pressure. Google's only source of significant revenue is advertising, and the street is already telling them to diversify. GWT (organic) + Analytics (paid) + Voice (Grand Central) + Email (remains to be seen) will put most of the analytics market out of business over the next 4 years.

Interestingly, I think GA becoming "non-free" will put significant additional pressure on existing analytics vendors. The sales strategy of "it sucks because it's free" or "it's a basic tool to sell more advertising" that most enterprise analytics vendors are using right now simply won't work anymore. While sourcing a quote last week from an enterprise analytics vendor, that response got a pretty big chuckle from me. GA has many failings, but it is not bad because it is free, nor is it designed as a basic sales tool to sell more AdWords.

Lord Majestic




msg:3902699
 8:33 pm on Apr 28, 2009 (gmt 0)

FWIW, I think you're off by 1-2 orders of magnitude

That would be range of $100 mln to $1 bln - the latter can't possibly be true.

There may 10 non-Google vendors who might make $50 mln each to make up market of $500 mln, there is no scope there to spend as much as you suggest.

Google already spends a lot on its infrastructure to have lots of redundancy and spare capacity - this can be viewed as zero cost if used for other things - unlike YouTube GA does not use huge amounts of bandwidth and processing also should be fairly easy.

Remember - "Google" Analytics is based on purchased Urchin team: just how big was it? A bit hard to say now but if you look at average employee costs of $100k per year, then $10 mln budget should be enough for 100 people - I don't think they had that many.

g1smd




msg:3902768
 9:48 pm on Apr 28, 2009 (gmt 0)

I thought he meant down, not up.

Lord Majestic




msg:3903521
 7:38 pm on Apr 29, 2009 (gmt 0)

I am pretty sure he meant up, as otherwise we'd be talking about $100k - $1 mln and that would be too low for sure. Chances are the biggest labour costs at Urchin were sales related, and now that they don't need to sell as aggressively as before they probably reduced them near zero.

Can't believe how many people use it - giving such valuable information to Google is crazy.

nealrodriguez




msg:3909486
 2:57 pm on May 8, 2009 (gmt 0)

IMHO, the days of G.A. as a 100% free product may well come to an end in 2009 or 2010.

i am thinking that google ad planner is going to justify the cost of all of this "free" functionality:

[webmasterworld.com...]

In addition, you can share your Google Analytics data with Ad Planner to provide advertisers with additional details about your site, such as the number of unique visitors and page views. By replacing Ad Planner traffic estimates with data measured directly by Google Analytics, you'll be able to provide advertisers with more accurate site traffic information.

the aforementioned option may replace estimating services like quantcast, compete, and alexa, which are typically way off mark. now you start to see how free products such as google analytics and feedburner can be monetized by augmenting content ad buys. i wouldn't be surprised if google were to open a free email marketing and autoresponder service, so you could showcase your lists on ad planner.

i only see google buying more social networks where people are typically truthfully transparent, and opening more community building features on their own sites like their patent on personalized search denotes:

[webmasterworld.com...]


if they can classify all of these users' interests, dob, and other demographic and possibly psychograhpic data, they would have a comprehensive data set advertisers can show off in products like the google ad planner -

further...

Through our analysis of tuning data from millions of set-top boxes, we're getting closer to matching the right ads to the right television audience.

[webmasterworld.com...]

more than ever before advertisers are looking for positive roi from their marketing budgets. i am thinking that the check will be paid to the order of the hustler who can persuade marketers that they'll pull off a positive return with the best math. and right now the 2 guys with the longest spreadsheet in the room have a .jpg image of a g on each worksheet.

simonuk




msg:3924680
 11:15 am on Jun 2, 2009 (gmt 0)

It's the old saying..."Knowledge is power" and Google have more knowledge about users and websites than any other company will have for the foreseeable future. That makes Google extremely powerful!

I'd never say never but Google can spot future trends and patterns quite a time before any other engine or app. Thanks to these free tools we use and love it gives Google a very big edge over all their competition.

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