Omniture: Making it count on Wall Street

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One thing that San Diego-based WebSideStory has that Omniture lacks is profits. Omniture's James says his company was at one point profitable, but execs put profitability on hold while they invested in "building up resources." That could cool IPO prospects in the short term, because investors may be leery of a company without a track record of profitability.

"Omniture's service really dropped jaws here. We saw our traffic in much greater detail."

--Marc Koif, senior interactive analyst, JetBlue

That said, Web analytics companies like Omniture, WebSideStory, Coremetrics, and WebTrends have come a long way since the dot-com bust, when the value of the basic site traffic data they provided was as sharply questioned as dot-com business models. The analytics companies often supplied information that was unsophisticated or too hard to understand, said Holly MacDonald-Korth, a vice president for Web site marketing at online retailer Overstock.com.

"It was Neanderthal click tracking," MacDonald-Korth said. "At that time, it wasn't much more than homegrown software."

Now Web analytics companies are supplying timely information that can be understood by non-statisticians, say customers. For example, managers at JetBlue Airways, which hired Omniture last year, need only pull up a Web page full of charts and graphics to see how their sites are faring.

When it came to understanding how customers were behaving on its Web site or what they wanted, JetBlue was "flying blind" before they started working with Omniture, according to Marc Koif, senior interactive analyst at the discount carrier.

"It was like turning on a switch," Koif said. "Omniture's service really dropped jaws here. We saw our traffic in much greater detail."

So what might be giving Omniture pause about going public?

Besides profitability, one reason may be Google. Though Google's new analytics service shines a light on the whole sector, the search giant could disrupt the economics of the business because its offering is free--though not yet as sophisticated as those from smaller rivals.

"We have high-end, Fortune 500 companies making inquiries as well as advertisers and Web publishers new to the Net...we're not leaving anyone behind," said Richard Holden, director of product management at Google Analytics.

All that will certainly weigh on any decision by executives at Omniture to test the IPO waters next year. But James, who co-founded Omniture in 1996, argued that the companies that survive toughening competition are the ones who can help their customers stay ahead of a rapidly changing advertising market.

"It's competitive because of the size of the opportunity," James said. "It's not about collecting information. It's about getting the right information to the right person at the right time."