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Google Buys Zagat, Gives Itself Extraordinary Rating

Danny Goodwin
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google-buys-zagat

Google has bought Zagat, an innovator of user-generated restaurant surveys. Google promises that Zagat ratings and reviews, which are currently behind a paywall, will become a “cornerstone” of Google’s local offering. Terms of the deal were not disclosed.

“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,” wrote Google VP Marissa Mayer on the Official Google Blog.

Established in 1979, the company’s restaurant recommendation guides regularly appear on best-seller lists. Tim and Nina Zagat attempted to sell the business in 2008 for a reported $200 million, but found no takers. Still, the company reported being profitable as recently as November 2010.

Online for Zagat, however, has been a struggle. Yelp, a free competitor (and one Google tried and failed to buy in 2009), saw its unique visitors traffic jump from 23.4 million to 33.3 million for July 2011 year-over-year, a 42 percent gain. Zagat, on the other hand, dropped from 298,000 visitors to 238,000 this year vs. last year for the same month, according to comScore's numbers obtained by ClickZ.

We don’t yet know whether the acquisition was VE (very expensive), E (expensive), M (moderate), or I (inexpensive) – in Google terms, anyway (note: VE, E, M, and I are the letters Zagat uses to indicate a place’s price range).

In a pretentious announcement on Zagat’s home page, Zagat gives the acquisition perfect 30 scores on local, social, mobile, and useful. Rather than using a star rating or traditional numbering system, Zagat awards scores from 0-30, with 30 signifying “extraordinary to perfection.” Zagat wrote:

ZAGAT, a “pioneer in user-generated content” and creator of the world’s most “influential” and “trusted” consumer reviews, has been acquired by another “renowned innovator”, GOOGLE; by combining their content, resources, and platforms, this “dynamic duo” plans to optimize the potential of the ZAGAT brand while offering “new ways” for consumers to “express their opinions” and “make informed decisions”; “thanks go to the millions of people” who have generously “shared their experiences” with ZAGAT over the years – we’re confident they will enjoy the “next course.”

For Google, Zagat's reviews, covering 13 categories in more than 100 cities, will become integrated with the newly revamped Places, Maps, and perhaps even Google Offers. In Places, Google currently shows a link to "Google reviews," and underneath that shows links to reviews located on other sites, such as Urbanspoon (which also recently signed a deal with Zagat), Yahoo, Insider Pages and OpenTable. And as this screenshot shows, Zagat reviews can already be found on Google:

buca-di-beppo-google-places

This is Google's 20th acquisition of 2011:

UPDATE: A Oct. 28 regulatory filing revealed the Zagat purchase price was $151 million (via Bloomberg).


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