WebSideStory Stock Falls on Google Plans

NEW YORK -- WebSideStory Inc. stock fell Monday after key competitor Google Inc. announced it will provide free Web-site usage tracking software, similar to the services Webside sells.

Shares of WebSideStory fell $2.10, or 12 percent, to $15.90 in afternoon trading on the Nasdaq Stock Market.

San Diego-based WebSideStory provides services that track and analyze visits to Web sites.

Monday, Google said Google Analytics, formerly known as Urchin from Google, is now free.

"When you wake up one morning and someone is giving away for free what you sell ... well," said Farmhouse Equity Research analyst C. Gregg Speicher.

However, Speicher said Google's offering differs from WebSideStory's higher-end services.

"These are two different business models," Speicher said. "Google might dent some of the potential, but we went into the story knowing that."

According to Needham & Company analyst Mark May, Urchin's product serves smaller Web sites need a simple, self-service analytics solution, whereas WebSideStory services large online companies that need more hands-on solutions.

"There is nothing really new with today's announcement," said May, who also noted WebSideStory's and Google's different audiences. "The product hasn't changed dramatically and free is close to $17 a month in the realm of Web analytics."

May said that WebSideStory charges $30,000 a year and up for its services, and noted that Google had cut Urchin's price from $500 a year to $200 a year prior to today's announcement.

WebSideStory was not available for immediate comment.

Needham makes a market in WebSideStory shares and has received compensation for investment banking services from the company. Farmhouse didn't have any conflicts to report.