Google bought an international media company known for respected restaurant and hotel reviews, likely in an effort to overshadow Yelp and other competitors, Google announced today.
Google bought Zagat, which calls itself a "pioneer in user-generated content," for an undisclosed amount -- although previous reports say that Zagat explored selling the business in 2008 and the company was valued around $200 million. That's $300 million less than the price Google offered for Yelp in 2009 -- and the startup walked away.
Marissa Mayer, Google's vice president of local, maps and location services, could hardly contain her excitement in the Official Google Blog post and her Twitter account, even issuing a haiku tweet: "“Delightful deal done; Zagat and Google now one; foodies have more fun!” and "Welcome, Zagat! A perfect 30 :)" on Google+ (30 is a perfect score in a Zagat review.) From the Google blog:
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. Founded by Tim and Nina Zagat more than 32 years ago, Zagat has established a trusted and well-loved brand the world over, operating in 13 categories and more than 100 cities. The Zagats have demonstrated their ability to innovate and to do so with tremendous insight. 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.
Interestingly, Mayer later describes its listings as "democratized, authentic and comprehensive," which makes us wonder who out there has undemocratic, inauthentic and spotty reviews? Oh, we get it, you're referring to Yelp! The online review startup that helped spur on the Federal Trade Commission's antitrust investigation against Google by saying that Google was burying Yelp's reviews.
While this is likely a strike against Yelp, the acquisition signals a new era for Google -- it is now acquiring original content and apparently workers (at least co-owners Nina and Tim Zagat.) Could it be much further away from buying a news or media service that gathers original content?
