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Omniture Deal Delights

Omniture (OMTR) is cementing its market dominance.

On Thursday, the Web analytics company said it would acquire rival Visual Sciences (VSCN) for $394 million in a cash-and-stock deal.

Omniture also forecast better-than-expected third-quarter results.

The company's move for Visual Sciences extends Omniture's lead in the rapidly growing high-end analytics market and was met with a wave of support on Wall Street. The stock was recently up more than 14% to $35.96. These gains follow a run-up of 120% since the start of the year.

The deal makes sense from both a financial and strategic perspective, Pacific Crest securities analyst Chad Bartley wrote in a research note Friday. Both Omniture and Visual Sciences use an on-demand software model, which could lead to substantial cost savings. Bringing Visual Sciences customers to Omniture's platform and up-selling them could also open the door for more revenue and earnings.

The move will bring more than 4,000 new customers to Omniture, Bartley noted. And it could take away pressure on Omniture to lower prices.

Indeed, the deal was seen as promising enough to have some analysts change their opinion on Omniture. ThinkEquity analyst Michael Huang upgraded the stock to a buy with a $38 price target because of the deal, saying that it would allow Omniture to out-muscle the competition.
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