Google Price Cutting: Predatory Or Building Business?

from the invisible-hand dept

Tue, May 3rd 2005 7:50pm — Dennis Yang

After acquiring web analytics firm Urchin last month, Google has cut the price of Urchin 60%. Since this is Google's third post-acquisition price drop (after Picasa and Keyhole), SiliconBeat predicts that the anti-competitive camps are salivating at the prospect of crying "predatory pricing". While it's true that Urchin's new price makes it inexpensive in comparison with its competitors, is it really possible to fault Google for anti-competitive business practices? It's called a promotion folks, a la free books and $1 DVDs. Sure, price cuts attract more customers and cause headaches for your competitors, but isn't that the nature of the business? Furthermore, it's important to understand that as prices get cheaper new opportunities arise. Google has long pushed analytics as part of its AdWords program by offering ROI tracking for all of its clients. With Urchin, Google is looking to impress upon more of its users the importance of analytics. Conspiracy theories aside (as in, is it good for Google to have access to all of this data?), the idea is that better analytics will lead to smarter ad spending, which is ultimately good for everyone. Do no evil, right?

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