Google is to offer its hosted web analytics service for free. Businesses will be able to use the service to track the effectiveness of online marketing campaigns.

The service, called Google Analytics, is free for anybody and has a page view limit of 5 million per month, a cap that is removed if the user is a Google AdWords advertiser, said Paul Muret, a Google engineering director.

Formerly known as Urchin on Demand, this service used to cost US$199 per month with a 100,000 monthly limit on page views, he said. AdWords advertisers also get some additional analytics features, said Muret, who founded Urchin Software, the website analytics system developer that Google bought earlier this year.

However, Google Analytics isn't meant to be exclusively an AdWords analysis tool. It is designed to be a complete analytics package that can monitor various types of online marketing campaigns from multiple ad sellers, Muret said.

Eric Peterson, a Jupiter Research analyst said that the whole analytics market should benefit from Google's move. He said that interest should enable companies to draw in new customers and put pricing pressure on vendors..

Google's move will negatively affect those analytics vendors that don't have strong professional services and consulting to complement their packaged or hosted software offerings, Peterson said. "Free is always compelling, but free from Google has historically been the most compelling offer," Peterson said.

However, vendors that have built strong professional services and consulting units, such as WebSideStory, CoreMetrics and Omniture, will be able to compete better, he said. This is because Google, at least so far, doesn't have a particularly large professional services and consulting staff for Google Analytics, Peterson said.

Although Google could quickly build a large professional services and consulting team if it wanted to, right now Google Analytics is more in line with the needs of small- to medium-sized businesses, and of large businesses that don't need or want that type of support, Peterson said.