In a move that was a little surprising (but I suppose not overly surprising considering the consolidation seen with WebSideStory and Visual Sciences), Omniture has announced that they’ll be acquiring Visual Sciences for approx. $394 million.
See the full press release here http://www.omniture.com/press/417 or here
http://www.visualsciences.com/press/20071025/1/
More News on the Merger
Biggest news on the conference call I’ve heard:
- Omniture will immediately convert licensing structure of Visual Sciences from perpetual licenses to term licenses (similar to that of WebTrends) - licenses will not be converted for existing customers
- Two products Visual Site and Discover will continue on as Discover and Discover onSite but will look more alike over time – meaning they’ll throw in some parts of Visual Site, but over time, it’ll be only one offering for advanced segmentation
- HBX is essentially going away eventually (after the close sometime in 2008) and new customers will be offered SiteCatalyst while current HBX customers will continue to be supported – for the time being however, HBX is still being sold to customers
- Pending Government and shareholder approval, deal will be closed in the first half of 2008
More interesting news on the merger – Omniture estimates that the web analytics industry is a $3-4 billion dollar industry with only 50% penetration. The proposed strategy for the merger is expected to bring the following benefits to customers (and shareholders):
- Increased market opportunity – obviously there are some instant revenue advantages to inheriting all the customers that currently belong to Visual Sciences
- Increased efficiency – in Omniture CEO Josh James’ words, Omniture plans to “rationalize expenses” between the two companies specifically expenses as they relate to “duplicated resources”. Obviously this is going to be the case with almost every merger, but it’s never great to hear about the possibility of people loosing jobs
- Increased scale – the additional revenue grab that Omniture gets will (apparently mean) additional investment in research and development, marketing and sales – get ready for Omniture commercials!
Opinions on the Merger
My personal feelings on this merger are a bit mixed actually. They’re both tools with great features and with that you think, “Hey! Imagine all the cool stuff they’ll be able to throw together!” But on the other hand, in market where there are only 4 big enterprise players to begin with, cutting things down to 3 means oligopoly and oligopolies mean collusion and collusion can mean a lack of price competition.
I’ll hold off on making too much of a judgment call on this just yet, but I have my worries.
How about “Imnotsciences”
Maybe a bit disappointing to you, but there is a 100% chance they’ll call it… Omniture!
Otherwise Team Green would have worked. Green as in their branding and green as in what won VS over.
Sounds just like basic economic theory to me….consolidation, economies of scale, which will hopefully lead to a phase of intense innovation and bring on lots of excitement in the years to come!