Less than a week after announcing that Yahoo! is to buy his company, Dennis Mortensen has announced that Yahoo! will be making IndexTools free to all customers, so long as they sign a new Yahoo! agreement. Those guys aren’t hanging around!
The chatter here at Microsoft is about about what’s likely to be that agreement. As I’ve said before, you can only afford to provide web analytics for free if you have other ways of monetizing the service. Yahoo! will certainly be expecting IndexTools customers to spend more on advertising with Yahoo!, or (if publishers) make more of their inventory available for Yahoo! to sell through its network, but wouldn’t need a new agreement in place to try to achieve those objectives (unless IndexTools’ existing license agreements are very restrictive about permission to contact to market other services, which seems unlikely).
So the most likely changed content in the new agreement is a clause to allow Yahoo! to reuse the web analytics data, most likely to bolster the behavioral targeting data that Yahoo! already has a very good collection of. In his post, Dennis says:
"I think this is a fair tradeoff for an Enterprise class Web Analytics system?"
I agree that it is, but it remains to be seen whether IndexTools customers (some of whom may have specifically chosen IndexTools over GA because they wanted their data to remain ‘independent’) agree. What’s most likely is that some customers will bail out, whilst IndexTools/Yahoo! will capture new customers at the free price point, who are less sensitive to the data issue.
Completely agree with you. The economic theory says that as close are the substitute products the variable “p” (price) gains more importance (if I have two identical products why should I pay more for one of them). Now we have to leave the book aside and concentrate in the real world. In the real world we don’t have two identical products (even commodities are not so) because each client has a very unique need and perception of what each product offers to him. So I’m not saying the market is not gonna change, because it will (and always was), actually it gonna very hard to paid tools to convince clients to use their product instead of the great Indextools :-). The fact is that not all the clients will welcome Indextools just because now it is free (and, off course, because it is one of the best tools in the market, at least in my own opinion).
There are lot of variables that may push a client to prefer paying a huge amount of money instead of having a free tool, even when they have a similar performance. One of those variables is the one you are mentioning in this post.
Great post Ian!
So here’s the curious thing: how do you get it if you’re not already a subscriber? I contacted the sales team and they told me the following:
“Following our recent acquisition by Yahoo! however, we will no longer be signing new partners or clients at this time. The suspension of partner signups went into effect immediately upon the announcement of the acquisition and is likely to remain in effect for the foreseeable future.”
Did I miss something?
Cheers,
Bill.
Bottree Media Consulting
http://www.bottree.com
Bill,
No, you haven’t missed anything. This, I think, is the flaw in this plan from Yahoo. By shutting off the tap (ok, faucet) in this way, they will generate some irritation in the market and certainly impact IndexTools’s momentum – if I worked for Omniture, I would be out spreading FUD about the future of the tool, and how you can’t get it now, so why wait, etc etc.
I can see generically Yahoo’s rationale for doing this – they clearly plan some changes to the nature of the service, and probably want to migrate it to their own datacenter & platform, and they don’t want to have to bother with onboarding during this time. But if it had been me, I would have waited a little longer for any in-progress deals to close before shuttering things now (and this may be what Yahoo is doing – Dennis’s post is only the public story). I don’t think it’ll hurt Yahoo in the long run, but it will create a bit of a bump now.
Cheers,
Ian