TheWhir is reporting on a press release by Google that they will release their web analytics engine (which they acquired from Urchin) for free. The service will generate revenue via their adwords service.

I wonder what kind of effect this will have on hosters and on competitors such as WebTrends. My experience with web analytics in the hosting industry is that hosting customers of managed hosting companies like to have decent web analytics as part of their hosting platform, but they don't want to have to pay for them. There is room for valued added services of higher-end analytics, but the segment interested in these types of reports are small in comparison to the entire customer base. The extended capabilities of software like WebTrends is usually overkill for the types of customers on shared or managed hosting platforms who are offering low-traffic sites, while the extended capabilities are very valuable for high-traffic ecommerce sites or online publications who are dependent on ad-generated revenue.

How will Google's offer effect the hosting industry, both from a hosting provider and hosting customer/reseller perspective? Is it fair competition for Google to release this service for free? I know if Microsoft did something like this, the DOJ would be clamping down on us within seconds.

I suppose that there will always be room for value-added services that provide higher-end hosted analytics than what google will offer for free. Nonetheless, as services such as this are turned into comodity markets, will this trend help or hurt the hosting industry? I wonder how long it will take for MSN to enter this market, now that Google is blazing the trail.

I'm posing alot of questions here, and time will tell some of the answers. I've personally spent a great deal of time in my professional experience with web analytics engines and farms supporting a large managed hosting environment. One one hand, I'm happy to see that someone is finally creating a hosted service solution for web analytics that is economical for the little guy. On the other hand, the Google behemoth really scares me, and I don't for one second find their marketing tactics altruistic.