Microsoft acquired the privately held Intersé to integrate its Market Focus 3 product into Microsoft's BackOffice product line. Terms of the deal were not disclosed.
Market Focus 3 allows companies to track users' Internet behavior while at a Web site. The software can check the number of times visitors come to the site, and advertisers can determine the number of new visitors as opposed to repeat visitors, according to Donna O' Neill, a spokeswoman for Microsoft.
She added the software allows Web designers to learn how visitors are interacting with their Web site, such as whether they are coming to the home page or going past it, so they can make appropriate changes to the site.
Intersé, founded in 1994, was also the first Web analysis software that can be audited by the Audit Bureau of Verification Services or the Business Publication Association.
With the acquisition, Microsoft is hoping the software will boost sales of its BackOffice software.
"Understanding usage patterns on your Web site is the best way to see what your customers are interested in so you can deliver the most targeted content," said Bill Gates, Microsoft chairman and chief executive, in a statement.
Meanwhile, Terry Myerson, chief executive and president of Intersé, said his company, which has been financially healthy and self-funded, will be better served by the resources of Microsoft.
"Combining the resources and vision of Microsoft and Intersé will promote the adoption and integration of our technologies into an expanded group of innovative Internet products," Myerson said of his three-year-old company.
He reiterated his software not only allows companies to analyze visitors' behavior but lets them take that data in determining which content to deliver to those visitors.
Myerson and his workforce will be folded into Microsoft's Internet services business unit and operate under the server applications division.
Microsoft, which has been an Intersé customer for a couple of years, initiated acquisition talks, Myerson said.
"We've had a strong relationship with Microsoft since they bought our software," he said. "And when they approached us [with a buyout offer], it was a difficult decision because we had invested a lot in the business. But in the end, we thought it would be best for our employees and customers."
Intersé has 30 employees and over 1,000 customers.