The Web analytics industry has been busy lately.  Let's review: 

• In 2001, WebTrends was acquired by NetIQ for $250 million in stock.  In 2005, they were sold by NetIQ to Francisco Partners for $94 Million in cash.
• In 2003, WebSideStory filed for a $57.5 million IPO.  In 2005, they bought Atomz for $59 million and this year, they bought Visual Sciences for $57.3 million.
• In 2004, Digital River bought Fireclick for $7.5 million ("fire sale?")
• In 2005, Google bought Urchin for approximately $30 million, and now they're selling their analytics for free.
• A few weeks ago, Coremetrics raised $31 million in funding following a $62 million round a couple of years ago.  Then, they announced yesterday their acquisition of IBM's SurfAid for approximately $10 million.
• In early March, Unica acquired Sane Solutions (NetTracker) for $26 million.
• Last year, Omniture raised $40 million after raising $25 million in earlier rounds.  Today, they announced plans for a $120 million IPO.  (Speculators like to surmise that they would eventually like to acquire Coremetrics...who knows if that is actually advantageous or probable?)

A bit tumultuous, don't you think?  What's next?  Is Yahoo going to buy ClickTracks?  If there's a race to be won, how do you name a leader?  Highest valuation?  That must be the WebTrends of five years ago.  First to go public?  Then congratulations to WebSideStory.  Most stable customer base?  According to their literature, that must be Omniture.  Superior technology?  Who knows...that depends on the needs of the user, right?  Exceptional leadership?  Is it possible to objectively compare guys like Josh James, Jeff Lunsford and Joe Davis without actually working with each of them?

My point is...it's pretty difficult to analyze an industry.  If you're placing a ton of importance in analyst reports, I can show you reports from recent years that miss the mark for each of the companies listed above.  The thing about software (or software as a service) companies is their inherant nimbleness.  A truly determined competitor can make huge strides within its industry in a short period of time.  The leader of one year might not be the leader of the following year and the provider that you decide upon today might not be the best fit for you tomorrow. 

So, whether you are a user looking for a vendor, a complimentary service looking for a partner, or an investor looking for returns, the Web analytics industry has certainly been an interesting guessing game.