What does Google want with Zagat?

By Felix Salmon
September 8, 2011
Google buying Zagat, a company which has failed miserably online, rather than, say, Yelp or Tripadvisor?

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Why is Google buying Zagat, a company which has failed miserably online, rather than, say, Yelp or Tripadvisor? I suspect a lot of the reason has to do with its pseudoscientific ratings, on a 30-point scale: Google loves being able to quantify stuff. But those ratings are silly: they’re not at all comparable between markets (try a sushi joint in Long Island and then compare it to one in New York City with an identical food rating), and they suffer from enormous inflation.

On top of that, the one concrete datapoint that Zagat does provide — the cost estimate — is simply dreadful. Steve Cuozzo exposed this five years ago, and nothing has improved since then — you will basically never get out of a restaurant for the ridiculously low price that Zagat purports to think that a meal costs.

Zagat is mainly useful as a source of phone numbers and opening hours — information Google Places already has. Yes, it has a trusted reputation — but Google has that, too. And it has a massive global print-publishing business; I can’t for the life of me imagine why that’s something that Google wants to get into.

Most puzzlingly of all, Google’s Marissa Mayer refers twice in her short official announcement to Zagat’s “insight” — it’s “impressive” at first mention, and “tremendous” at second. Does anybody have a clue what she’s talking about? Zagat doesn’t do insight — that’s simply not the business it’s in.

So color me very confused at this weird entry into what looks very much like Old Media — something which was very useful before the mobile internet came along, but which has already been comprehensively disrupted by Google itself. Google is the future of information; Zagat is the messy and conflicted past.

Ethical questions about the Zagat guide abound — about the way that restaurants game their ratings, the things that diners will do for a free guide, and the way that Tim and Nina Zagat themselves are extremely chummy with the restaurateurs they’re judging in a supposedly objective manner. I hope Mayer and Google know what they’re doing, here. But it makes no sense to me.


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I bet Google attempts to sort of squish it together with Places, Maps, Reviews, and maybe even Offers to try and basically create their own version of Yelp. They could have done it without Zagat, of course, but the brand is probably worth something to them since it might entice a lot of people less fluent in online services to flock to Google instead of Yelp.

Posted by MaxBDC | Report as abusive

Google is trusted in many respects, but NOT for business recommendations. In fact,the way they sell prominent positions in search results (yes, they’re labelled, no, not everyone understands why) acts AGAINST trusting them to offer unbiased critiques.

It’s a smart move aimed at attracting older, more cynical and affluent users to Google local.

Posted by LadyGodiva | Report as abusive

astute post, Felix.

I wonder if you noticed that this paragraph you wrote:

“Most puzzlingly of all, Google’s Marissa Mayer refers twice in her short official announcement to Zagat’s “insight” — it’s “impressive” at first mention, and “tremendous” at second. Does anybody have a clue what she’s talking about? ”

looks a lot like a typical Zagat review – with little bits in “quotes”… ;-)

Posted by KidDynamite | Report as abusive

How large is their database of reviews, and how does that compare to Yelp? Maybe the raw data is more valuable than the packaged form.

Posted by AngryInCali | Report as abusive

This is Google simply trying to counter Yelp. Since they stopped including Yelp reviews in their review aggregation, they’ve had too few reviews of most restaurants. (People go to Google to find places but don’t stay to review.) So instead of quantity, they are looking for some high quality results that they can safely put in the summary of their ratings.

If they just include scraped reviews from the web, it’s hard to have a quality filter. They likely looked for a partnership and then realized that a purchase was just easier.

Keep bringing up the risks for Google–they likely see curated reviews as slow, but insightful because their point of reference is automated and lightly filtered (yelp, tripadvisor), not a restaurant critic. Conflict-of-interest at the high level of being chummy with owners is not really on their radar screen.

Posted by michmill | Report as abusive

Google seems to value pedigree and reputation. Just as Google prefers to recruit at elite universities it seems to prefer established brand names such as Zagat over upstarts such as Yelp.

Posted by foobar441 | Report as abusive

I suspect that Google did what many, many acquirers have done over the years–contracted a survey! And guess what? Lots of people have heard of Zagat. Many, many more, I suspect, than have heard of Yelp or Tripadvisor or whatever the latest fad is.

Zagat has been publishing their guides for a long time. That tends to build credibility, especially with folks who don’t have time or money to dine out continually. And brand awareness matters. It’s not everything, but it’s a starting point, and starting points are worth $$$ when coupled with a growth vehicle and a revenue engine.

So, makes sense to me. But hey, I’m just a buy-side dweeb with 2000 shares of GOOG. What do I know?

Full disclosure: I wish I had more.

Posted by Publius | Report as abusive

Based on the leftovers He brings me, i find that Zagat quality ratings within a city are pretty good guides. You are completely right about inflation when one leaves NY — but then again, everything is deflated when one leaves NY. (i can even say this about my recent trip to Vancouver, which was pretty good, but still not NY.)

i agree with you about the prices. Where do these come from, anyway?

But Zagat is a million times better than Yelp. Tripadvisor is actually not too bad. But unlike either, Zagat can be read for amusement. He still remembers a review that said, “A good place to find a boyfriend, unless you’re a woman.” And another that said, “The real reason to go is to observe the latest Paris fashions… and the latest advances in plastic surgery.”

It’s about curation, me boy.

Posted by samadamsthedog | Report as abusive

Odd that you support content aggregation of news but find content aggregation of opinion to be uncompelling.

Publius: I wish I had $1m of GOOG too.

Posted by loudnotes | Report as abusive

I spent about 10 hours discussing with someone who got the impression from the National Restaurant Association meeting last May that Google was going to try to roll out a reservation system. I work with http://www.reservationgenie.com and we hypothesized that they would make it open so sites like ours can use their back end to help promote the restaurant with rewards programs and concierge referral management. Open Table’s 10% stock drop kind of supports that theory. Having an affiliate site drive traffic to your customers is valuable way of getting new customers. We have a whole reseller program built around it.

Posted by Rusky661 | Report as abusive

Open Table’s stock drops, but Zagat already uses Googl Maps, and you can reserve a table via Open Table directly from Zagat’s Website. Don’t know about this Nina and Tim.

Posted by Brupub | Report as abusive

There’s a possibility that all Google really wants is the brand– They’ll put ‘Zagat’ on a Google-crowd-source service, and it’ll be famous immediately.

Posted by MattF | Report as abusive

Hopefully Zagat has some prized patents, otherwise i have no idea.

Posted by marantz | Report as abusive

I think it’s fair to say, there was too much bad blood between the two companies.

Google tried to buy Yelp in 2009, but it collapsed. A year later Google started posting its crawled reviews from Yelp in its Google Places, but that’s nothing new, considering the same thing goes on with Google Books (reviews from Powells, Amazon and B&N). Yelp complained, so Google removed them from its listings.

Google didn’t just buy Zagat, it bought into a revenue stream from other GPS providers who add Zagat ratings into their POI.

Posted by GRRR | Report as abusive

It is simple housekeeping…Google just bought an old house in Beverly Hills with a famous history that they are going to remodel to beat the latest hottest competition in that neighborhood. Google eats micro and spits out macro. Personally, I think they should rethink their strategy. People are totally overwhelmed by the macro chaos of social media and the internet. They want and need micro to stand on and calm the storm. When I hear GOOGLE now I can not even think through all they have and do. When I think Facebook, I think friendly neighborhood. When I think Yelp, I think livable neighborhood. When I hear GOOGLE, I think BLACK HOLE in the universe.

Posted by SocialSweetSpot | Report as abusive