Jeopardy Answer: Who are Two Companies That Google Will Make Obsolete In the Next Five Years? Question: Omniture and Offermatica

This morning I saw the news that Omniture – the Web analytics giant – had acquired Offermatica – the multivariate testing giant for $65 million.

Initially, the deal struck me as a little odd. Both of these companies’ business models are being directly attacked by Google’s “software for free” business model – Omniture by Google Analytics, and Offermatica by Google’s Web Site Optimizer.

It would be like the world’s biggest typewriter (Brothers?) and telegraph (Western Union) companies merging in 1985, when the computer and the telephone/Internet were on the verge of destroying both businesses.

I do believe that both Omniture and Offermatica currently offer far-superior tools to the free tools offered by Google. But I also believe that a) Google will continue to improve their tools and b) there are many current Omniture and Offermatica clients for whom it is a smart business decision to save the $50K to $100K a year for each of these services and use Google’s sub-standard version. And the size of the client exodus will only increase as Google’s tools get better.

So this begs the question – is this acquisition a desperate attempt by two dinosaurs to survive the ice age/asteroid/intelligent design, or is there a more clever reason lurking beneath the surface?

My guess is that the answer is a little of both but mostly the latter. Conventional wisdom in the SEM space says that Microsoft will want to compete pound for pound with Google – both out of hubris and business necessity. That same conventional wisdom suggests that Microsoft needs to either build or acquire a Web analytics platform and to integrate it with AdCenter.

At the moment, there are three likely acquisition candidates for Microsoft – Omniture, Visual Sciences (the artist formerly known as WebSideStory), and CoreMetrics. Perhaps an acquisition of a leading multivariate testing company will give Omniture the upper hand in this race to be acquired – perhaps the incentive to kill two ‘anti-Google’ birds with one stone will be too much for Microsoft to resist.

If that is the rationale for this move – kudos to Omniture exec – your shareholder should be proud. Then again, I often give business leaders too much credit for dumb business decisions. My litmus test for this acquisition is simple: if Omniture is acquired before January 1, look back on this deal and give it a big thumbs up.

 

My Guide to Ad-Tech San Francisco

Ad-Tech begins tomorrow, which means that many of us will be sporting new t-shirts, koosh balls, and slightly fatter bellies (from the free dinners) when the week is through.

I’ve never paid for the Ad-Tech speaking sessions; I’m perfectly happy to wander the exhibit hall in the hopes that I find a company I’ve never heard of before. But I’ve been to enough Internet trade shows to be able to pass on some sage wisdom to those of you who actually paid to hear speakers. Here’s my advice on how to spend your time wisely:

1. Avoid “Agency” Sessions. When it comes to TV and magazine advertising, big agencies are worth listening to. When it comes to anything Internet marketing related, agencies have absolutely no clue what is going on. Expect to hear a lot of catchphrases and not a lot of actionable advice.

2. Avoid professional trade-show speakers. You know the type of person I’m talking about, the speaker that manages to show up on the bill at every trade show (often on multiple panels), and does a great job of promoting his/her agency/consulting company. These folks give the same speech over and over again, and I suspect that they spend so much time speaking that they don’t actually have time to ‘get their hands dirty’ and keep up-to-date with changes in the industry.

3. The lower the title, the better the speaker. When I was working for the Thomson Corporation (a 40,000 person company), I remember the day that the CEO of the company came to speak to our team. He gave a very impressive talk about changes in the global economy, trends in organizational behavior, some big building the company was building in Connecticut, and many other points that had no bearing on my daily life. The point is this: CEO and VPs are paid to think about the big issues; as a result, these folks generally have very little practical advice for how to optimize your campaigns, buy media, etc. Look for “manager” or “director” next to someone’s title as a sign of a good presentation.

4. Focus on today. People love to speculate on “what’s next.” Unfortunately, speculation doesn’t pay the bills. Spend your time in sessions with tips for what you can do today to grow your bottom line. Don’t waste your time listening to prognosticators telling you to put all your money and time into mobile-video-local-rss-podcast hybrids.

5. Some good sessions. OK, OK, enough of my kvetching. Here’s a few presentations that look like they could be useful:

• Thursday, april 27, 10:30am – 11:30am
  The Economics of Interactive: Part I Industry Investment and M&A For Fun and Profit
• Thursday, april 27, 11:45am – 12:45pm
  The Economics of Interactive: Part II M&A in Interactive Marketing
• Thursday, april 27, 2:00pm – 3:00pm
  Pay Your Agency On Results: Risk-Sharing Compensation Models
• Thursday, april 27, 3:15pm – 4:15pm
  Click Fraud Debate
• Thursday, april 27, 4:30pm – 5:30pm
  Workshop: Scientific Approaches to Multivariate Testing
• Friday, april 28, 10:00am – 11:00am
• James McGregor—One Billion Customers: Lessons From the Front Lines of Doing Business in China

Also, some exhibitors worth talking to:

• Adteractive (of course)
• Bruce Clay, Inc
• comScore Networks
• Google (if only for the schwag)
• Marchex
• Offermatica
• Optimost
• Revenue.net (If only to meet Jay Weintraub in person!)
• The Search Agency (again, if only to meet Frank Lee in person!)
• WebSideStory