Except for a handful of deals, such as Loopnet and J. Crew, the IPO market has been harsh lately. This is something Omniture (NASDAQ:OMTR), a business software provider, experienced this week. Its weak IPO, though, is more than just a reflection of the overall anxiety of the market; rather, investors have legitimate concerns about Omniture.

Omniture initially set the price range of its IPO at $8 to $9 per share. But even the company's top-tier underwriter, Morgan Stanley, was only able to get investors interested in the deal at $6.50 per share. The stock currently trades at $6.85.

Omniture sells software that is delivered via the Internet. Essentially, the software captures and analyzes traffic that comes to a website.

Take Alienware, which is a manufacturer of high-performance computers. About 80% of its revenues come from Web channels. The company implemented Omniture's software to analyze Web traffic, as well as manage marketing campaigns, such as bidding on keywords on Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO). As a result of Omniture's software, Alienware made adjustments to its product mix and marketing message during the 2005 Thanksgiving season -- and sales doubled.

In fact, Omniture has over 1,000 customers. Examples include Apple Computer (NASDAQ:AAPL), eBay (NASDAQ:EBAY), and Microsoft (NASDAQ:MSFT). However, Omniture does have some customer concentration; AOL and eBay account for more than 20% of overall revenues.

There is definitely a need for tools like Omniture. If anything, online advertising is becoming much more complex, with a variety of channels such as blogs, podcasts, videos, email, affiliate programs, comparison shopping, and so on.

I talked to Kraig Swensrud, CEO of the online marketing firm Kieden.com. According to him, "The feedback cycles for offline marketing programs are often measured in weeks and months. On the Internet, the evolutionary cycles can be measured in hours."

No doubt, Omniture sees an enormous growth opportunity. To this end, it is taking a similar approach to Salesforce.com; that is, plowing significant amounts of money into sales and marketing. And it is working, as sales increased from $20.5 million in 2004 to $42.8 million in 2005. In the first quarter of 2006, the company generated revenues of $16.4 million.

However, Omniture is also sustaining significant losses. Last year, the losses totaled $17.3 million.

This is expected for early-stage growth companies. But, for the most part, investors are lukewarm to these plays. A prime example of this is the Internet phone company Vonage, which saw its IPO lose 50% of its value in a few weeks.

True, as Omniture gets more critical mass in its revenues (such as over $100 million), it should be easier to cross over into profitability. But this will likely take a year or more. Unfortunately for Omniture, so long as investors are skittish of early-stage growth companies, this stock will probably be treading water.

For more IPO Foolishness:

eBay is a Motley Fool Stock Advisor recommendation. Microsoft is an Inside Value pick.Check out our suite of investing newsletters with a 30-day free trial.

Fool contributor Tom Taulli does not own shares of companies mentioned in this article.