Paella in Barcelona. Photo credit: Terence, Subtle Devices
Hungry Google has made its latest acquisition: the venerable restaurant-review service Zagat. The search behemoth didn’t disclose a deal price for the firm, whose founders Nina and Tim Zagat had tried and failed to sell the company in 2008.
According to Marissa Mayer, Google’s famously foodie VP, Zagat will be “a cornerstone of our local offering,” and she was so excited she even tweeted a haiku about the deal. But what can we expect Google to do with their new toy?
- What’s Google up to? “Google wants Zagat for its reviews,” opined Erick Schonfeld at TechCrunch. Google has struggled to nail its local search offering, and is locked in battle with local reviews service Yelp, which it attempted to buy in 2009. And Zagat is like Yelp, “except with far fewer reviews,” as Schonfeld pointed out. However, he also believed the deal was “a smart move” that allows Google to “beef up its local reviews and ratings.” Dan Primack at Fortune focused on Zagat’s “deep relationships” with restaurant owners. “That, not content, is what Google really paid for today,” he claimed, suggesting that Google might also look to develop a “portal for reservations” from the service. And seasoned tech industry commentator Robert Scoble took to Google+ to declare the deal a “good purchase.” He declared that Zagat had “the best database of restaurant information in the world” and predicted that Google would capitalise on the social aspect of restaurant reviewing – “There are tons of ways to tie restaurant data into our social streams,” he said.
- A ‘problematic acquisition.’ Not everyone was so quick to applaud the deal. Patricio Robles at eConsultancy thought it might turn out to be “Google’s most problematic and challenging acquisition ever.” Robles was nervous about Google’s entry into the review publishing business, pointing out that this will “test its neutrality” in terms of ranking its own content vs its competitors’, i.e. Yelp’s. He also doubted Google’s ability to successfully manage the well-loved offline Zagat publications and worried that the search engine “may end up destroying the entire brand.” If that wasn’t all bad enough, Robles saw the deal as an ominous sign of confusion in Google’s long-term strategy. If Google “genuinely feels that it needs to buy a company like Zagat [to achieve it’s core goals], it has big problems,” he fretted.
- Dodgeball all over again? If the acquisition does turn out to be a stinker, it wouldn’t be the first time Google has got it wrong. Ryan Tate at Gawker provided a handy rundown of previous Google deals that have gone sour, including the failed bid to buy Groupon last year, and the company’s infamously poor treatment of Dodgeball founder Dennis Crowley. Crowley, of course, eventually left Google and started the wildly successful Foursquare. Can Nina and Tim Zagat stick around a bit longer?