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flurryTwo analytics startups, Flurry and Pinch Media, are announcing a merger today as they try to create a mobile data analytics leader. While Flurry has been focused on e-commerce, Pinch Media was focused on ad optimization. Together the companies intend to go beyond just providing data and become a media company that offers services to developers, such as ways to mine data from users and target them with recommendations for mobile apps.

The merger will create a company with 20 employees in San Francisco and New York. When the deal closes, the combined company will be known as Flurry, and its leaders hope it will be better able to keep up with the fast-changing smartphone industry. On the analytics side, the company’s competitors will be Medialets and Mobclix.

“We felt the companies shared the same vision,” said Simon Khalaf, chief executive of Flurry (and soon-to-be CEO of the combined company), in an interview. “We will collect data and offer services to developers.”

Both companies have launched widely used analytics services for the iPhone and Android phones, but they aren’t profitable yet. To monetize the data, Flurry recently launched AppCircle, a recommendation platform. Developers install it in their games and it analyzes a user’s taste in apps. Then it recommends apps for the user. These recommendations are likely to be highly useful because they’re based on the user’s past purchases. Flurry gets paid through a revenue sharing agreement with the developer.

Khalef, who spoke at our recent DiscoveryBeat conference, said that’s just the beginning of services coming from the combined company.

Khalef said no one is being laid off and the company will have eight open positions. By the end of the first quarter, Khalef expects the companies to be able to offer a single combined service with the features of both Flurry and Pinch Media. In the meantime, both companies will maintain their existing services.

The core market, the iPhone and iPod Touch, continues to grow. The number of apps available in Apple’s AppStore is expected to grow from about 117,000 now to more than 300,000 by the end of 2010. If you throw in Android apps, Khalef estimates the number will hit 400,000. Analytics from the combined firms will run on more than 80 percent of all iPhones, iPod Touches, and Android phones. The companies also offer Java and BlackBerry analytics.

Pinch Media chief executive Greg Yardley will become vice president of products. The companies’ backers include Draper Fisher Jurvetson, Union Square Ventures, First Round Capital, and Draper Richards. The combined company will consider a round of funding in the future.


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