How many people do visit our website? Are your visitors increasing (or decreasing)? What are visitors looking for in our webpage? How much time do visitors spend in the webpage? Where do visitors come from? How the traffic to the website have changed after a new publicitary campaign after, and so on.

If you can sleep thinking in all questions, web analytics tool will try to solve them for you, tracking your sites´ statistics, possibly helping to understand your customers´ wants and needs.

Numbers get by the use of this tool should be considered as a tendency and not as absolute. For example, cookies allow identifying visitors, but these cookies can be deleted, blocked o get locked by any user.

Google analytics is probably the first and the sole web analytics that which rings your bell. But there are bunches of web analytics out there:

ClickTracks
WebTrends
WebSideStory HBX Analytics


Sources:

http://www.techsoup.org/learningcenter/internet/page6760.cfm
http://en.wikipedia.org/wiki/Web_analytics
http://www.advanced-web-metrics.com/docs/accuracy-whitepaper.pdf