Google acquires Zagat, enters original content business
Google on Thursday acquired Zagat in an effort to bolster its local products with the restaurant rating service. More notably is that Zagat is a content company.
In a blog post, Google said that Zagat will "be a cornerstone of our local offering." Zagat is best known for its original reviews and rating service.
There are a few key elements to the Zagat purchase:
- Google will build out its local coverage and have reviews in more than 100 cities.
- Google is showing that it may actually have to own some content instead of merely aggregating it.
- As Robert Scoble noted, Zagat's reviews are social friendly and play in with Google+.
Earlier this year, Google ran afoul of Yelp. Yelp argued that Google was importing its user reviews on the Google Places page and not providing any link love. Google later removed external links from its Places page. The Federal Trade Commission is also poking around Google's actions and whether it favors its own sites over others.
With that backdrop, Google's move to buy Zagat makes sense. Zagat's will boost Google's local coverage by providing:
- User surveys.
- Recommendations and ratings.
- Guides that can be aggregated into Google services and maps.
Last year, Google was rumored to be in talks with Yelp. Now it appears that Google is going for old school content brand names. You could argue that Google started dabbling with content via its purchase of ITA, but that's arguably more about an online travel database.
The Zagat purchase, which probably didn't amount to any material sum for Google, raises a few interesting questions.
- Will Google keep Zagat's pay wall? Probably not.
- Will Google maintain Zagat's guide publishing business?
- Is this Zagat purchase the beginning of a series of content moves for Google? Google's timing is notable given the struggles of both AOL and Yahoo of late. Both AOL and Yahoo are building out content to differentiate themselves from Google. Now the search giant enters the content game via Zagat.
In a letter to users, Zagat founders Nina and Tim Zagat said:
Nina and I will continue to be active in the business as co-Chairs; however, the merger of our resources, expertise and platforms with those of Google will give us the opportunity to greatly expand. We have spent enough time with Google senior management to know that they fully share our belief in user-generated content, and our commitment to accuracy and fairness in providing consumers with the information necessary to make smart decisions about where to eat, travel and shop...
We couldn’t be happier to see our baby placed into such good hands and are looking forward to being Googlers in the years ahead.