Google has acquired Zagat, the survey company and multimedia publisher known best for its highly regarded print guides to local restaurants.
The acquisition strengthens Google’s position in local search, helping it compete with web-native companies like Yelp, particularly for high-volume searches for restaurants and hotels. It also means that much like Yahoo or Microsoft, Google increasingly owns outright some of the media content it serves up for searches, rather than simply indexing and influencing it.
In the official announcement, Google VP Marissa Mayer points to Zagat’s innovative role in gathering and dispersing information in the analog era, adopting a strategy very similar to Google’s digital approach.
“Their surveys may be one of the earliest forms of UGC (user-generated content),” Mayer wrote, “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.”
Its print guides may be iconic, but Zagat hasn’t sat on its hands in the 21st century, either. It has a popular website offering free and subscription content, and paid “Zagat to Go” applications for the major smartphone platforms and iPad. It has partnered with FourSquare to do check-ins and pull in reviews and comments about local restaurants, and with OpenTable to book reservations. Zagat’s mobile apps use location services and augmented reality components, and generally do almost everything you’d want a mobile recommendation application to do.
In a video interview with Rackspace blogger Robert Scoble, co-founder Nina Zagat and mobile lead Ryan Charles explained Zagat’s approach to mobile:
So with Zagat, Google gets a company that isn’t just steeped in tradition and brand cachet, but is also more or less already fully baked for digital. That makes it a natural partner for mobile and local search and recommendations. Google’s and Zagat’s teams can hit the ground running.
On Twitter, Google’s Mayer added an “acquisition announcement haiku” [line breaks inserted]:
Delightful deal done
Zagat and Google now one
Foodies have more fun!
But Zagat is still somewhat unusual for a Google-owned company in two ways:
- Zagat isn’t just a site, service or application, but a substantial creator and owner of original content that it publishes both digitally and in print.
- The bulk of that content, particularly the high-value content, isn’t free to users and supported by ad revenue like most of Google, but financed by a combination of advertising, print and app purchases, and web subscriptions.
Our sources at Zagat tells us that the company has no post-acquisition plans to change its current content pricing. Zagat believes its original reviews still can and will command a premium.
So Google really is in the media-content business — and at least for the near future, under a fairly traditional model. But it has to figure out a way to adapt at least some of Zagat’s content into its wider efforts, and vice versa, or the merger of the two companies’ efforts won’t add much value at all.
In “Google As Content Company — A Trend Worth Watching,” John Battelle suggests the acquisition signals a significant shift, marking Google’s willingness to expand to areas it previously left to partners and advertisers:
Google is walking a thin line here — media partners are critical to its success, but if it’s seen as favoring its “owned and operated” content over those who operate in the open or independent web, well, lines may be redrawn in the media business.
Now, it’s easy to argue that this was a small, strategic buy to support Google’s local offering. Then again … Blogger, YouTube, and Google TV are not small efforts at Google. And if I were an independent publisher who focused on the travel and entertainment category, I’d be more than a bit concerned about how my content might rank in Google compared to Zagat. Just ask Yelp.
So … what other content-driven categories might Google find the need to get into? Well, ask yourself this question: What other content-driven business categories are important to Google?
“Organize the world’s information and make it universally accessible and useful” doesn’t really narrow down that list.
Redmonk co-founder James Governor expressed the same sentiment with more pith on Twitter: “Zagat isn’t the end, it’s the beginning. All those content companies used to whine about Google: They’re all puttin’ lipstick on right now” [punctuation and capitalization added].
Yoni Appelbaum, a historian and contributor to The Atlantic Online, draws a parallel between Google’s acquisition of Zagat and the evolution of the classic Michelin restaurant guides in France. “André Michelin used local guidebooks to encourage driving, sell tires,” Appelbaum says. “He didn’t want driving to be a new way of doing old things; he wanted it to be an entirely new thing to do. Google bought Zagat to do the same for internet search.”
This spirit of adventure could help distinguish Google and Zagat from Yelp, Bing and other competitors. “Zagat doesn’t just offer good local info,” Appelbaum adds. “It promotes the foodie belief that good eats are worth hunting down. Google thrives on people searching for new experiences.”
Suddenly, Google isn’t the algorithmic lowest common denominator. Much like the early days of its search and e-mail products, it becomes the smart, informed, aspirational choice.
Another possibility: Google puts its big web-sucking data machine to work, along with its brand-new Google+ social network content, and creates an improved digital counterpart to Zagat’s surveys.
Those two sources of information are then blended. Some is shared publicly through Google searches. The rest goes to augment Zagat’s premium recommendations and advertising power.
Gathering up the world’s information and selling it to someone else to improve what they do? Now that business model is classic Google.