In fact, trade publication InfoWorld recently gave its top score to WebSideStory's flagship HBX analytics service. It was the only "excellent" rating among all comparable services.
The good news is starting to translate into stronger quarterly results, as seen in last week's report from WebSideStory. In the fourth quarter, revenues were $6.5 million, which was up 43% from the same period in 2003. During this time, net income more than doubled, going from $404,000 to $840,000.
Moreover, in the fourth quarter, WebSideStory purchased Atomz, a leader in on-demand digital marketing tools. Integrated with HBX, WebSideStory will have a full suite of on-demand digital marketing applications. New features will include bid management, site search, and content management.
While there has been a surge in online marketing, it is becoming increasingly complex for companies to measure success. With WebSideStory's suite, companies can make sense of things.
Many firms try to perform their analytics in-house, but the prevailing wisdom is that a third party generally gives a less clouded picture. WebSideStory is just such a third party: a Switzerland of digital marketing and one whose clients include Best Buy
To succeed in online marketing, effective measurement is absolutely necessary for all players, meaning the small ($200 million market cap) company should be one to watch for some time to come.
Fool contributor Tom Taulli does not own shares mentioned in this article.