Google Buys Zagat To Up Local Content

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Zagat Survey is a world leader in consumer survey-based information on the best places to stay, eat, drink and party around the world. (Photo: Hans Thoursie)
Zagat Survey is a world leader in consumer survey-based information on the best places to stay, eat, drink and party around the world. (Photo: Hans Thoursie)

BUSINESS

  • Zagat buy offers reviews and deals on local restaurants, hotels and nightlife using Google maps
  • Google estimates 20% of its daily searches are for neighborhood establishments
  • Zagat's online home will remain a paid site

Google Inc. has purchased world-renowned dining review expert Zagat Survey in a bid to offer more local content. The acquisition will let people find local reviews and discounts for restaurants, hotels and nightclubs, using Google’s well-known online maps and mobile search engine.

Details of the deal were not released; however it is rumored that Google paid $100 million to $200 million for Zagat Survey. In a blog post, Marissa Mayer, Google vice president for local, maps and location services, said: “Zagat will be a cornerstone of our local offering, delighting people with its impressive array of reviews, ratings and insights. 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.”

More Mobile-Friendly Information

The purchase of Zagat is also part of Google’s attempt to accommodate its online services to mobile devices. Since consumers readily rely on mobile phones and social networking sites such as Facebook for up-to-the-minute information and reviews, Zagat provides guidance and opinion in a few short sentences. Google estimates that about 20% of its daily searches are for neighborhood establishments and approximates that percentage is higher when consumers are searching on their mobile phones.

In an interview with Reuters, Mayer said Google needs to provide more than just directions and maps to consumers searching for information on neighborhood restaurants and businesses: “It is also (about) giving them a sense of place. A sense of what to expect. Zagat reviews, in a few short lines and a few scores, give you a great sense of place very quickly when you are on the go.”

Zagat’s reviews will supplement Google Places, an existing service for listing local businesses and reviews, but Zagat's online home will remain a paid site for the time being.

Bid for Yelp Unsuccessful

This buy supports Google's aim to better compete in the local restaurant review category against leaders like Open Table, which provides restaurant reservations on Google Places, and user-review leader Yelp, which Google unsuccessfully tried to buy in 2009 for $500 million.

Greg Sterling, an analyst with San Francisco-based technology solutions research firm Opus Research, believes the Zagat deal is a consolation prize: “They went after Yelp, which would have been a bigger prize for them for many reasons, including salespeople and a sexier brand. But this is a pretty strong acquisition.”

Started as a hobby over 30 years ago, Zagat Survey is a world leader in consumer survey-based information on the best places to stay, eat, drink and party around the world. Zagat employs 100 full-time staff in its New York City office, but has over 350,000 contributors worldwide.

Zagat founders Nina and Tim Zagat said in a blog post that joining forces with Google is “the right next step for our employees, our users and for our business, all of which will benefit from the additional resources and reach that Google provides.”

Key Statistics – Google Facts (Source: Pingdom)

  • Google.com domain went online in September 1997.
  • Google.com daily page views are 7.2 billion and monthly worldwide searches on Google sites are 87.8 billion.
  • In 2004, Google.com employed just over 3,000 people; today there are almost 20,000 employees.
  • At the time of Google’s IPO in 2004, the stock price was $85. In February of 2010, the stock price was $535.
  • Some 45% of Google products are in the beta testing phase.

By Stephanie Lagopoulos for
Based in Toronto, Stephanie Lagopoulos is a freelance journalist covering lifestyle, travel and technology. She also works in the advertising industry.

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