Google Analytics Urchin Origins

A story about how David Friedberg helped create Google Analytics through the acquisition of Urchin while at Google.

"I pitched Larry and Sergey early on about the idea that our advertisers should have analytics on their web pages to see how people are converting. Initially, Larry and Sergey said 'that's evil - third party cookies are evil, we don't want to track users across different web pages.' They were fairly prescient at the time, seeing that this might be viewed negatively by consumers down the road.

But we showed them that if advertisers can get analytics, they can see incredible improvements in conversion efficiency, which means users have a better experience on webpages. Our guiding principle at AdWords was that advertisements should be so good that 100% of the time people click on the first ad and never come back - meaning zero bounce rate. This would show we've shown the perfect ad that's even better than organic search results.

We found a company called Urchin. I took Wesley to SES Search Engine Strategies, we walked around, met several analytics companies, had 4 of them come talk to us, and we picked Urchin. We convinced them to join and convinced Larry and Sergey to do the deal for $25 million.

Within a year, our chief economist Hal Varian demonstrated that Google Analytics increased AdWords revenue by half a billion dollars because advertisers were using it to improve their websites and conversions, leading them to spend more on AdWords. It turned into a great product - I don't know any web pages now that don't have Google Analytics on them."