Would you pay $100 per year for Google Analytics?

Back in February our newest partner Adam Greco waxed philosophical about Google offering a paid version of Google Analytics. He got a bunch of feedback and all-in-all the post raised some interesting questions about Google’s place in the web analytics marketplace. Now there is a new rumor — one far less substantiated than the so called “Enterprise” offering Adam discussed — but one with potentially more far reaching implications.

On a call today, we heard that Google may be considering charging everyone for the use of Google Analytics.

Everyone? Yep. Everyone.

The details were sparse and wholly unsubstantiated, but come from a source that we generally trust as reliable. And while we normally don’t deal with rumors here at Analytics Demystified, given Google’s footprint — conservatively estimated to be around 30,000 business sites around the world with perhaps an order (or two) more non-business sites being tracked today — the implications of this rumor are interesting for two reasons:

1. If Google were to charge a fee similar to other of their offerings, say $100 per year, to use Google Analytics, these fees may produce millions of dollars in annual revenue (and profits) for Google and their investors. Outside projections for Google Analytics installations range into the millions, which, given a reasonable retention rate (say, 10%) would produce substantial revenue. Given the changes Google is going through right now on their management team it’s hard to say how important “revenue” is, especially when the bandwidth and data storage costs for Google Analytics are likely to be significant given estimated volumes and at a time when Google is being criticized over their increasing operating costs. Given the constant criticism over the years of Google’s inability to generate profits outside of their advertising business perhaps this sort of obvious revenue is suddenly appealing.
2. If Google were to start forcing folks to pay, this might be a huge boon to the emerging “secondary” market of web and digital analytics vendors including Woopra, Chartbeat, Performable, Clicky, Kissmetrics, and a rapidly expanding set of web and mobile analytics vendors who largely charge tens to hundreds of dollars per month. Despite the odds given the footprint “traditional” web analytics vendors have within the Enterprise, combined with the hegemony Google has over entry-level businesses and small companies, in the last three years we have seen a surprising “second coming” of web analytics vendors gaining traction in a variety of niches. Be it real-time analytics for blogs (Chartbeat, Woopra), funnel analysis (Kissmetrics), heat-mapping and session recording (Robot Replay, ClickTale, Reinvigorate), or customer-focused analytics (Performable), these companies are, by-and-large small, agile, and somehow managing to gain adoption despite the presence of Google and “the bigs”.

This second implication is very interesting to me … the fact that against well-established, already deployed, and in Google’s case completely free competition, these start ups are able to grow and, at least in a few cases, thrive (see Clicktale, Robot Replay who was acquired by Foresee Results, Performable, etc.) Imagine the glee that founders and investors in these companies would experience if Google Analytics were to put up a real (albeit potentially small) barrier to entry. It likely wouldn’t be enough to stop companies, but it might be enough to make them think “Hmm, I wonder what else is out there?”

Given that most of these start-ups are focusing on ease-of-use and specific use cases, and in many instances are doing a pretty darn good job (my opinion), this pause might be exactly what these start-ups need. Heck, it might even help some of the bigs, given the trouble they have had selling against Google Analytics juxtaposed against the dramatic interface changes that some are poised to unleash. Don’t get me wrong — I’m not saying that Google charging $100 for analytics magically re-opens the door for traditional vendors with annual contracts in the tens of thousands of dollars. But every substantial change in the marketplace is an opportunity for great management teams, and Google suddenly charging anything would surely be a substantial change.

But I digress.

At the end of the day I personally consider it highly unlikely that Google would start to charge everyone just because they can — it just seems like an unnecessary and “evil” thing to do (despite the fact that we did the same thing earlier this year at Twitalyzer without any negative impact on our business.) Still, Google is held to a pretty high standard, and I suspect that the (relatively) small amount of revenue they would ultimately generate is hardly worth the negative press they would likely receive.

But I’m interested in what you folks think. Would you pay $100 per year for Google Analytics as it exists today? What if they offered more features or functionality? If the latter, what would they need to add to get you to pony up? Or would you immediately pull the code off your site if Google required any kind of payment? If so, why?

I welcome your comments and conversation.