Let’s say you’re the world’s largest restaurant-review-on-the-Internet company. Let’s say you’ve been rumored to have turned down acquisition offers from Google. Let’s say Google decides to buy another company instead; one with a far better reputation, a far longer pedigree, but nowhere near your Internet presence.
Are you nervous?
You’ve probably already heard that Google has bought Zagat. The acquisition came just yesterday, and it isn’t one of those “requires federal anti-trust approval so it’s not a done deal yet” scenarios. Zagat has announced that Google has bought them. This means that Tim and Nina Zagat got less than $66 million for their baby, since anything above that automatically triggers a federal anti-trust review.
Nice move, Google. Zagat had been previously rumored to be on the block for much more, and Yelp would have cost a fortune. So the question is: can Zagat do for Google what they would have liked Yelp to do … make Google a powerhouse in the data behind local restaurant reviews?
Most opinions have been that yes, this is a great move for Google. In fact, the only real dissenting voice I’ve heard on this has been Danny Sullivan. And Danny, a big-time Search Engine Optimization Guru, didn’t exactly object so much as point out that Yelp has a whole bunch more traffic than Zagat.
True enough. Zagat makes money publishing physical paper books, and because they’ve stuck to a model where reading their Internet-based version requires a paid subscription Zagat has hamstrung their own growth when compared to the free Yelp. Google claims they’re planning to leave the paid model in-place at Zagat for the foreseeable future. I predict that “the foreseeable future” will end before 2011 does. Probably sooner.
How long until Google/Zagat catches up to Yelp? It doesn’t matter.
Make no mistake; Zagat’s traffic will get huge as soon as Google integrates Zagat reviews into their search and mapping products. Remember when Google dropped all reviews other than their own just a few weeks ago? Zagat’s should be tied in at any minute. Moving forward you’ll see Zagat get bigger and bigger as Yelp sees their prominence move in the wrong direction.
See, the issue here isn’t Yelp’s current size or their head-start over Zagat. It’s about Zagat giving Google the content they need to keep searchers on their site(s) instead of having them flit off elsewhere.
Oh: and then there’s the fact that Zagat reviews are generally seen as the gold standard of restaurant reviews while Yelp’s reviews are less and less reliable as time goes on and the system gets gamed in one way after another.
The Zagat acquisition might be one of the smartest deals Google’s done to date. They got a great price, “bought reliable content”, and will satisfy users. It’s a home run. And huge, viable business change. For everyone.