Have you ever wondered why Google Analytics is free? After all Google Analytics previously known as Urchin did cost $495 per month before Google’s acquisition. That’s a huge amount! Why it costs “Zero” now?
Well there might be a lot of possible explanations but here is my version of explanation for this. Google’s PageRank is the most popular and widely accepted way of evaluating particular page’s importance on a scale from 0 - 10, where 10 is the highest. Everybody wants a higher PageRank, that’s for sure.
As for Google, it’s a very challenging job to assign every page (of every site) on internet a PageRank. Especially when Google do not know much about the traffic of a particular site. In that case, Google has to rely on external information. It can be their own Search Engine data, Alexa data, number of links pointing to particular site…etc
Magic Formula
When Google gives you its Google Analytics for free to track your stats, they are also getting a valuable info back (complete info about your site). Because now your site becomes transparent to Google. Google does not have to predict and rely on external information to determine your pages’ PageRank. It can give you the exact PageRank your every page deserves. They can track every unique visitor, every pageview, every click, entry pages, exit pages… everything!
Here is a hypothetical situation (see image below). Let’s say you didn’t know about Google Analytics and you had a PR5 site. Then you found out about GA and installed it in your site. Suddenly next PageRank update your site gets PR3! (Or it can be vice versa too, you had a PR3 then after installing it you got PR5 or 6). But I am guessing it’s the first case most of the time.

So Google Analytics is not just a free statistical tool to track your blog’s or site’s visitors, if you are looking for a simple stats tool then there are plenty of them. By using Google Analytics you are doing much more than just to track your visitors, I am sure Google uses those stats not just for their PR prediction, maybe for their search engine results too.
P.S I hope Google won’t penalize me for this article and take away my PR7 ;)