Google feasts on dining reviewer Zagat
— -- Google has gobbled up reviews giant Zagat in an aggressive move into local content serving businesses and consumers — and the ad opportunities that go with it.
New York-based Zagat is best-known for that familiar burgundy review logo in restaurant windows. But it's expanded into 13 categories in more than 100 cities since Tim and Nina Zagat began it as a mom-and-pop business some 32 years ago.
"We are very excited about the acquisition because we think it's going to be a great addition to our local offerings," Google Vice President Marissa Mayer says. "We see a number of ways to integrate the offerings of the Zagat team."
Zagat restaurant reviews are based on a scale of 30 points and feature quotes from diners who rank food, decor, service and cost.
Google's deal for Zagat promises to roll the reviews into its popular services such as search, maps and places, which help local businesses stand out online.
Zagat, which also reviews airlines, hotels, nightlife and other forms of entertainment, had come under heavy competitive pressure from free online services. Zagat, which also sells books, is a subscription-based online service.
Rivals Yelp, TripAdvisor and other free services were nipping at Zagat's heels, Sterling Market Intelligence analyst Greg Sterling says. "That's one of the factors behind the decision" for Zagat to sell, he says.
Zagat was on the block in 2008 but was unable to reach a deal. The company then was reported to be valued above $100 million. Terms of the Google-Zagat deal weren't disclosed.
Google reportedly set its acquisition sights on Yelp a few years ago but a deal never materialized. More recently, it's had a tense relationship with Yelp over use of its reviews.
Yelp CEO Jeremy Stoppelman told The Telegraph of London in March: "We are unhappy with the way Google uses our users' review on its Places page." He said Yelp was given an ultimatum by Google that the online reviewer could remove itself from its search index if it didn't like the situation.
"This makes Google's fight with Yelp far more interesting, too," tech blogger Robert Scoble wrote on Google+ of the Zagat deal.
Yelp has faced criticism that fake reviewers can easily game its system to influence rankings.
Tim Zagat says its reviews mechanism catches the self-promoters trying to goose their stature. "We know how to recognize when a restaurant is voting for itself." And he says his reviews get editorial review and that his brand stands for honesty.
"Reviews are a huge part of how consumers make decisions," says Carroll Rheem, director of research at PhoCusWright, a travel technology research firm. "It's another element of stickiness for Google."
