Google Picks Up Zagat to Bolster Local Reviews

Everyone remembers Google’s loss on Groupon, but before that they couldn’t seal the deal with Yelp either. Fast forward a few years, and Google has a Groupon competitor under way, but no product to pose a significant challenge to Yelp. Since it seems like most of the product team power has been dedicated to Google+ (and they even missed a few things there), rather than trying to catch up solely through their own branded local ratings Google acquired the 32-year-old, consumer-driven restaurant review company Zagat. {Google Blog}

In the official announcement, Google’s Marissa Mayer (who heads Google Local products) says

“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…

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.”

It’s an acquisition that also officially puts Google in the content business. The tie-in with local products is obvious, but until now Google has largely relied on other websites – including Yelp – to fill its review section. We have to wonder if the acquisition means that Yelp, and other sites who previously provided reviews to supplement the ones written directly through Google, will see their search traffic squeezed and pushed through to Zagat. It’s not that Zagat’s content is bad: they actually have a very well respected brand as far as restaurant reviews go, but would they be the best choice in every case? Yelp hasn’t been around as long as Zagat has, but what they may lack in perceived quality, they more than make up for in quantity.

According to Google AdPlanner, had 830,000 visitors in July, compared to Yelp’s 38 million.

That’s a very significant difference, and while the Zagat reviews may help fill in some of the blank reviews in Google’s local listings, they won’t cover nearly as many as Yelp can. It may also explain why Google was able to get Zagat for less than $66 million {TechCrunch}, but not Yelp for $500 million.

While fewer reviews doesn’t necessarily correlate to quality, in some cases reading reviews from 100 people might give a better indication of the quality of a restaurant or hotel than a score based on reviews of 3 people. Would Google push the 3-person review because they own the content?

The acquisition/failure proves that Google doesn’t necessarily do their content acquisitions any favors, but we have a feeling this may be different. Zagat is already being integrated into other Google products in a way that Boutiques wasn’t, and this is an attempt to compete with a defined competitor.

The best review of a successful acquisition will require a bit of time though, so we’ll keep an eye out to see what direction it takes.



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