Google Analytics is a tool that allows users to understand website traffic and user behavior through statistical reporting. It provides information on metrics like user demographics, traffic sources, bounce rates, and user flows between pages. Google acquired Urchin, the creator of Google Analytics, in 2005. Google Analytics is a free service that allows tracking of up to 50 websites per account. To set it up, users create an account, get a tracking ID code, and install the tracking snippet on their website pages. This enables collection of data that can be viewed through various reporting formats in real time or historically.