Google Acquires Zagat

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Google has acquired Zagat for an undisclosed sum.

Google executive Marissa Mayer said in a blog post that Zagat will become a “cornerstone” of Google’s local services, which include listings and maps for restaurants and other small businesses.

Google announced the deal on its blog.

I’m thrilled that Google has acquired Zagat. Moving forward, Zagat will be a cornerstone of our local offering—delighting people with their impressive array of reviews, ratings and insights, while enabling people everywhere to find extraordinary (and ordinary) experiences around the corner and around the world.

With Zagat, we gain a world-class team that has more experience in consumer based-surveys, recommendations and reviews than anyone else in the industry. Founded by Tim and Nina Zagat more than 32 years ago, Zagat has established a trusted and well-loved brand the world over, operating in 13 categories and more than 100 cities. The Zagats have demonstrated their ability to innovate and to do so with tremendous insight. Their surveys may be one of the earliest forms of UGC (user-generated content)—gathering restaurant recommendations from friends, computing and distributing ratings before the Internet as we know it today even existed. Their iconic pocket-sized guides with paragraphs summarizing and “snippeting” sentiment were “mobile” before “mobile” involved electronics. Today, Zagat provides people with a democratized, authentic and comprehensive view of where to eat, drink, stay, shop and play worldwide based on millions of reviews and ratings.

For all of these reasons, I’m incredibly excited to collaborate with Zagat to bring the power of Google search and Google Maps to their products and users, and to bring their innovation, trusted reputation and wealth of experience to our users.

Zagat was founded in 1979 and rates restaurants on a 30-point scale based on consumer surveys and reviews. Its guides include short paragraphs culled from those reviews, and it operates in 13 categories and more than 100 cities.

 

 

 

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

Comments

  4. LM says

    Now, if Zagat were a green startup and came to domainers for advice, they would’ve been told that they stood no chance to succeed, since they weren’t using the domain name “Local.com”.

  5. Rob Sequin says

    I think this is huge news and great for the domain industry. Google is saying load and clear that they are going local and in a VERY smart way.

    VERY smart move and probably many more acquisitions to come by Google and other Players who want to buy into local markets.

    This makes it clear that local and “stuff near me” is the next big thing.

    Great for Angies List, travel guides and maybe even local newspapers.

  8. T1D says

    It’s a very smart move. They can kill three birds with one stone. Groupon, OpenTable and Yelp. Oh yeah they just acquired Motorola, that company that is pretty good at creating tablet PC’s. I wonder if they’ll start offering a low cost alternative to OpenTable soon.

    I remember telling someone with a vested interest in this (dining) space to move quickly and launch a product, too bad they didn’t listen.

  10. Cartoonz says

    The content controlled by Google is going to be an issue… weren’t the travel agencies freaked about this a while back?

    Then, with Motorola and the tablets…. will we end up with OpenTable(t) ?
    …with a travel app to boot?

  13. LM says

    Its good to be king
    —

    That’s what they all think, before the antitrust action bashes them in the face.

  14. [] domains with a meaning [] says

    lately (and in the past) Google has closed websites and services that costed hundreds of million$

    so, very often, big companies buy other companies only (or mainly) because they have huge amount of cash that must be used in some way

    e.g. the Google buy of Motorola doesn’t seem so strategic for the Android market that grows very quickly also without sell Google phones

  15. local says

    re: localisation

    one can see lots of gps coordinates being offered up in various web-based directory services. and then there are the issues with tracking people via their smart phones. but it’s not just with gps that some companies are aiming to determine where you are.

    be aware that now the majority of your ip address (123.456.789.xxx) is being written into your dns queries if you use opendns, google’s public dns and some other dns services. how anonymised is this? they analogise this to anonymising phone numbers like (123) 456-xxxx. that’s potentially a lot of numbers.

    but isn’t that a bit different than 123.456.678.xxx
    where there’s only 255 possible matches? consider that given the way ip addresses are allocated and used, in blocks of minimum sizes, all 255 of those numbers will almost always be used by the same organisation, possibly all at a single location, with an identifiable physical address. not quite so anonymous as the phone number example.

    so what does that have to do with localisation, and stuff like choosing a restaurant?

    opendns offers many reasons being why they’re doing this (more efficient routing, yada, yada), and they even admit there are privacy concerns since this info is easily leaked, but nowhere do they mention the possibilities it opens up for delivering more _localised_ ads. with this hack, now they know not only what a user typed but where that user is. of course they say nothing about any limitations on how they are permitted to use this info. is it only limited to improving content delivery speeds for users?

    people who use these dns services are now allowing other parties (not just the owners of the websites they access) to know where they are, to an unprecented local level, and with some digging maybe even more. a _great_ sales pitch to advertisers, imo.

    of course these are just my thoughts. maybe they will not use the info for advertising purposes. but then how would we know?

  16. Philip Corwin says

    Personal take: Just got a renewal notice from zagat.com the other day, prior to the acquisition, and had pretty much decided not to do so because my use of the website had fallen to about zero.

    Back when they were the only user-sourced restaurant review site I’d use them a lot, at home and on travel. Then Opentable came along and more and more I’d wind up there when I wanted to book a restaurant identified via Zagat.

    Eventually I just started going to Opentable directly, eliminating the middleman. Yes, there are some restaurants listed with Zagat that can’t be booked via Opentable — but that means making a call, often leaving a message and hoping for a call back, and that’s all too inconvenient.

    Seems to me that Zagat using Opentable for reservations was as misguided as Borders using Amazon as its online store.

    So did Google buy an online company with a failing business model, or will it use its search capabilities to breathe new life into it and try to take out Opentable (if the latter, could be more grist for the antitrust mills)?

  17. BFitz says

    Well it appears Zagat is a OpenTable affiliate, which means G is now. It is a good affiliate program once you break 100 reservations a month which Zagat easily does. OpenTable closed the program to new affiliates in the U.S. a couple years ago.

    It will be interesting to see how Yelp reviews continue to rank. Will Google put Zagat above Yelp reviews? (remember CitySearch anyone?) Yelp should be calling the Justice Dept.

    When you consider the number of U.S. restaurants that actually take reservations and would spend a nickle on a system, OpenTable’s market share is nearly 40% already.

    Customers book through what is there. Blue Skies, Live Bookings, etc. It’s getting restaurants to drop OpenTable, the historical customer count data and dining room management ease plus abandon their reviews that is the hurdle of a OpenTable challenger.

    The Groupon-like discounting is rapidly hitting it’s ceiling in the restaurant space. From the National Restaurant Association on down the push back is there. We are over companies making money selling our goods at a loss to us. All of these companies will take a restaurant offer and run it that week. Spa’s, gyms, cleaning services, etc. are the ones who have to wait months and are the back-log the online discounters talk about.

  18. Jason Thompson says

    Great acquisition, Zagat is a well recognized brand here in Los Angeles. Groupon is losing it luster and if Google has anything to do with it they will no longer exist in a few years. 🙂

  19. iphoness says

    This is an excellent move by Google and their location based aspirations. There’s no doubt Zagat stood as an industry standard, and has moved into the future very well. Established and ready to go..

  23. T1D says

    Zagat was actually an investor in OpenTable back in 2000. They “peaced out” of their position and sold all of their shares (about 150,000) in the OpenTable IPO in 2008. That says a lot considering that’s right around when Zagat started shopping themselves around with no takers. There are a lot of analysts who are now saying that this acquisition has more to do with the business relationships that Google gained instantly.

    “Google Offers” is very important to them. The following is part of the statement that the Zagat’s made in announcing the acquisition.

    “After spending time with Google senior management discussing our mutual goals, we know they share our belief in user-generated content and our commitment to accuracy and fairness in providing users with the information needed to make smart decisions about where to eat, shop and travel.”

    Eat, Shop and Travel.. Think about their other recent acquisitions and the ones they’ve tried to make.

    There’s no way that Google would allow them to make any kind of statement about soon launching a competing application, but I’d say it’s 90 days out if not already developed. IAC (urbanSpoon) already has something that’s gaining traction that’s an iPad app.

    http://www.businessinsider.com/urbanspoon-open-table-with-new-ipad-reservation-app-2010-5

    It looks like a great product.
    http://www.youtube.com/watch?v=vzRdlN_D3dg

    OpenTable has a P/E of almost 70. That’s with their market cap getting nearly halved in the last 6 months. This company is in serious trouble. If they got an offer from Google next week to get bought for 30% more than what they’re trading for, they should take it. If you own the stock I’d get out now, it doesn’t look good for them.

    I’ve researched this vertical exhaustively for a past client with a major presence online in this space. I can tell you with 100% certainty that Google is positioned perfectly to crush OpenTable in 12 months or less. They now have not only the content, sales channel, hardware (Motorola) but software as well.

    I hate to see Google come in and destroy such a hard working group with such a great product, but it’s hard to imagine that OpenTable is going to be able to survive this long term. This might be a game ending scenario for them.

  24. BFitz says

    @TD1

    Thank you for the informative comments. While OT is expensive, the alternatives are too streamlined. They also have such a lead as I noted above. Also, the real issue restaurateurs have with OT is the cost per person on a reservation. A party of four is $4, most think it is $1 per table which is not true. Unfortunately the UrbanSpoon option is the same charge, so why change. There is only a slightly lower hardware cost per month and not one really worth business interruption of a change and, again, loosing the social and review ratings one has on OT. I already have reviews on UbranSpoon and Zagat so there is no added benefit to using their system from that point. However, fire OT and I loose 500 reviews and numerous awards from their members. OT really thought it through and built a genius of a system.

    To really compete with OT on pricing one needs to provide a monthly system for a flat rate of about $150 a month per location. I don’t see how this leaves any room for a profit and certainly not a potential top line that will get anyone’s attention.

    I believe you are spot on regarding Google wanting to gain access to local restaurants and essentially buying the pond for which to fish for ppc customers. I was the only restaurant doing ppc in three cities a few years ago and Google actually called me and asked for a list of my major competitors. I laughed and hung up on them.

  25. BFitz says

    Zagat is now appearing in the PPC column of many restaurant searches. I wonder if they are paying themselves per click?

  26. HM says

    as a restaurant, why pay for a monthly service?
    as a customer, why pay for an iphone app?

    google will offer the same for free with android connecting to their super fast cdn.

    the problem with these iphone app businesses is they are approaching the problem the wrong way. they want lock-in, apple style.

    they might achieve temporary success. but in the long run, this is a fail.

    charging subscription fees for information (any kind of information) is a business model that is only getting weaker with every passing day.

    in the new game, whoever delivers the information the fastest, and most easily digestible, and with the least cost barriers to access wins. there is plenty of room to compete with google in that game.

    but too many strategists are wasting their time adopting a microsoft, apple or facebook mentality, trying to lock others into a proprietary platform. including google. fear of the competition.

    they’re too worried about controlling people through apps or access to apis. amazon may beat them all as they seem the least paranoid about locking people in.

    long term apps, apis and lock-in’s are not going to be a winner. not against a fast, OPEN, FREE service, like google, or ??????.