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Sounds like they are releasing it just after hearing the news about Twitter Analytics.
Google will always have a "no fee to site owner" version of Analytics
About your question on why GA is “free”. Here is one way to look at it: the online marketing industry is still relatively young. To convince marketers to shift their offline to online spend, there need to be very good reasons. As an online advertising platform company, it is in Google’s interest to help convince marketers that online advertising can be very accountable. There are many marketers who cannot afford certain solutions in the marketplace. GA tries to satisfy the measurement & reporting needs of these marketers. It also turns out that GA has been designed very well (IMHO) — some enterprises also find GA more than meeting their measurement & reporting needs.