Yahoo Acquires IndexTools


The ongoing industry consolidation continues as Yahoo have acquired IndexTools and it’s potentially an industry changing line in the sand. It’s more than possible that the entire toolset that IndexTools own will like Google Analytics before it be given away to it’s 150,000 customers that run Yahoo accounts. Heartfelt congratulations to all at Indextools, especially Dennis, Charlie and Marton. It couldn’t have happened to a nicer set of blokes!

There is a BIG difference between the GA announcement a couple of years ago and now. Google Analytics in comparison to IndexTools is low end. IndexTools 9 is a powerful solution with excellent segmentation capabilities, good integration and bid management systems.

Rubix the tool which IndexTools have yet to even release comes on the back of years of work and is truly an outstanding offering, the closest I’ve seen to Omnitures Visual Site which I think is the best Analysts tool in the world. If, as I’m speculating, they give this away in the new Yahoo system then they (Yahoo Index - My suggestion for a name!) :) would be my first choice of Analytics vendor for the 75% of my current clients.

The way I see it, this acquisition can make web analytics a commodity as Ian Thomas (hat off to him) predicted and I opened up for discussion earlier this year. I never imagined that a system would be given away that was powerful enough to make web analytics a commodity until now.

This could shift the industry towards developing people and process in order to build competence around tools such as IndexTools in the future.

To their credit Omniture at least made a comment but they did play it down with this reaction from Niel Morgan;

¢‚¬Å“This is a very late move by Yahoo! into providing a web analytics offering to its customers which Google and Microsoft have done for over a year. Clearly it will be focused on helping maximise their ad sales, so once again the market has lost an independent web analytics tool and their customers a unbiased way to measure their results. IndexTools always tried to compete as ¢‚¬Ëœgood enough¢‚¬„¢ web analytics at a very low price, so presumably Yahoo! will simply give it away and curtail its development, not great news for IndexTools customers who have been paying for their service. The real question of course is if the Microsoft acquisition of Yahoo! goes through which ¢‚¬Ëœfree¢‚¬„¢ tool will they give away first, IndexTools or Microsoft Gatineau?¢‚¬

The “un-biased” card is a good one. Customers who don’t want their information in the hands of a potential competitor is still a reason to pay someone to keep your information away from them. However it’s short sighted to say Yahoo will “curtail the development”. Did Google? Why then would Yahoo?

I could argue that SiteCatalyst alone is no better for 99% of the functions than IndexTools 9. Yes SC has lots of add-ons like Offermatica, Data wharehouse and has great integration with other tools but all for extra fees and even with the extra stuff IndexTools ctaers for 75-80% of it anyway.

So what will Omniture really do to counter this? they can no longer rely on the “quality” of their base system in my opinion.

This is not good news for Omniture and I feel like Neil has been purposely reacting to bad news as best he can to keep his shareholders and his employees happy. Omniture share price has been dropping for a while now and another 3 dollars were knocked off at one point yesterday after this announcement. Omniture though are in the strongest position financially and technically of all the vendors. At least they have something extra like Visual Site. How do Webtrends and others like CoreMetrics react to this? An open question and I could find no response from any vendor websites.

This in my view is more evidence of two tiers of analytics opening up. Customer analytics and web analytics with web analytics fast becoming a commodity. Vendors who make a living from the tools either need to find a Microsoft, Google or Yahoo which can add value to their current services by including free analytics or get into customer analytics.

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A couple of comments:
- What on earth is this Rubix thing? Do you by any chance have any links or something like that?

- If Yahoo Index was released, I’m pretty sure it won’t be based on a FULL version of IndexTools. Rather the free Yahoo analytics package will be a limited version, and then you can perhabs subscribe to additional functionality.

It IS very interested to see what will happen with IndexTools. I myself haven’t decided yet whether I think this is good or bad news.

Hi Søren,

Rubix is the latest version of IndexTools which has yet to be released - now we know why as it was on schedule till about February. It’s a very advanced system designed for the analyst which I have seen demonstrated a couple of times. I was the first person (outsider) to review it last year;
http://www.blackbeak.com/2007/11/22/indextools-might-just-fill-the-void/

Regards whether it will be a limited version. Firstly I disagree with the business logic of that argument. Why buy a tool only to continue selling advanced features? Yahoo will gain more credibility by releasing the full version of the enterprise level than they could ever earn by selling it. Think about it, what is a few million a year in turnover to them? It’s better to offer their customers high end analytics that draws many Google customers to them (if even to only get better analytics). That is far more valuable to Yahoo than the turnover IndexTools even with Rubix would bring.

Secondly the evidence I have seen and heard points to this being the case. When folks at Microsoft (Ian Thomas) and Google (Brian Clifton) tell you it’s very difficult to make money as a web analytics vendor in comparison to adding value to their own systems, you have assume that Yahoo will follow suit.

My question back at you is, Why wouldn’t Yahoo give it all away if you’re a Yahoo customer?

Thanks for your comments.

Heya Captain :-)

Ah, I’m allready working with some of the features of Indextools 10, just never heard the name Rubix before.

To answer your question: Some features of IndexTools, like Campaign Management, Bid Management, Segmentation Setup, Custom Fields, Filters etc. etc., is IMHO so advanced that the majority of those who’s after a free analytics tool will only be confused by it.

Now, I’m not saying that Yahoo/IndexTools should necessarily charge for those additional advanced features, they just need to be hidden away a little in the “basic” edition that most users will want to use.

What I like most about Google Analytics has allways been its ease of use even for people who don’t fully understand web analytics. If Yahoo/IndexTools is able to do the same PLUS having all these advanced features implemented in a way that doesn’t confuse the basic users, that would be perfect. Unrealistic IMHO, but perfect :-)

I definately think they should launch a basic, simple version that could get people new to the business started. And another version(s) or additional modules for those that need to take their analytics to the next level.

IF, that is, “Yahoo Index” will actually happen. There’s still no confirmation on this.

@Søren

I agree with that. I feel the basic Enterprise 9 version is fine for most people and as intuitive as GA.

Modular add-ons could be provided and it will be interesting to see how they handle it.

Neil’s comment originated from the WebAnalysts.Info blog where the news of the IndexTools acquisition was released minutes after the official press release. ;)

@Lars

Neils comment came from a standard release sent to Omniture staff, but yes I physcially saw it first on Lars’ blog who was the first to break the news. I only posted it when I saw an email from an (undisclosed) member of Omnitures staff. :) I think there was probably only one other person outside of IndexTools/Yahoo aside from Lars that knew about IndexTools before their official release and that was another Satama connection, Eric Peterson who wrote a great response about this as well.ÂÂ

Mr. Blackbeak,
I have to take issue with your 99% claim. If you are a small business, IndexTools or Google Analytics may be the right choice for you. However, mid-market and enterprise customers demand advanced functionality, deep domain expertise and specialized services. Omniture is a proven provider of these solutions for 4400+ customers.
Recent analyst reports haven’t even included IndexTools in the enterprise category, since the majority of their customers are small businesses (80% of IndexTools customers are SMB according to CMS Watch.) This move was a competitive response to Google. Yahoo!’s re-entry into this market confirms what Omniture customers already know – that Web analytics is mandatory if you run a Web site. I have written more on the subject here: http://blogs.omniture.com/2008/04/10/is-web-analytics-easy-hard-how-about%e2%80%a6mandatory/

@Brent;

Firstly thanks for your comments. It’s always good to get the perspective of one of the vendors. Let me first say that this is my opinion and not that of Satama. Let me also stress that I am not saying that Omniture is poor solution, far from it, it excellently caters for the needs of enterprise clients which is why Satama is a parter.

Omniture have as you say a proven track record in working with enterprises whereas IndexTools have more small to medium level companies, again this is true. There is a lot which Omniture offer in terms of support and knowledge of the enterprise level client that IndexTools have less experience with. This is Omnitures strength and along with the acquisitions you’ve made why Omniture is in the position it’s in.

My 99% claim is from a purely technical standpoint. Technically there is nothing that SiteCatalyst alone (without any add-ons) can do that IndexTools cannot. I know this being an experienced consultant working with Enterprises such as Nokia, Kone, MTV3 (all your enterprise clients), and over the years with dozens of clients using IndexTools. I personally have IndexTools running on my site and know how powerful it is.

Working on a daily basis with the enterprises I mentioned (as well as others using other tools) has taught me what is needed by the enterprise and I can tell you that IndexTools 9 (without Rubix) does an equally good job as SC alone.

Just because IndexTools doesn’t have your client base doesn’t mean that the tool couldn’t do a job for them with the right people and process behind them. This is why this is potentially an industry changing move.

This is the main point of my post. Google analytics has never been a threat to Omnitures business because over time it became clear it lacked fundamental tools like strong segmentation, a data wharehouse upon which filters could be run, easy tagless campaigns etc. etc. Enterprises all tried it and then realized they couldn’t get the same level of insight as with a tool like SiteCatalyst or HBX.

The great thing about GA was the awareness raised around the industry. It probably helped Omniture get more clients. However the Yahoo acquisition means if they role out a similar program to Google to support IndexTools the landscape will change fundamentally.

The question is no longer about the tool but rather about the people and the process.

This is my point.

I’ve read other analysis disagreeing with my opinion and they could also be right. It’s why I said that it’s potentially going to shift (not that it WILL shift) from being about the tools to being about the process and people. What I also see is most of the enterprises being advised by highly paid consultants and with a recession coming up in the USA cost cutting is going to happen.ÂÂ

The “game changer” is that if a tool like IndexTools is free then why pay tens of thousands on SC when analysis and insight is not handled as part of the cost?ÂÂ