Yesterday, Google announced that it is acquiring Zagat, a company whose name has become synonymous with printed restaurant guides. By size, the acquisition is likely nowhere near Google's largest.

As observed by TechCrunch, it appears that the acquisition price was under $66m.

But Google's Zagat acquisition has created quite a lot of buzz, and for good reason: this could arguably be Google's most problematic and challenging acquisition ever.

Here's why...

Google is officially a publisher

In buying Zagat, there can be no doubt that Google is officially a publisher, and this will really test its neutrality.

How, for instance, will Google compete with Zagat foes like Yelp (which Google once reportedly tried to acquire)? Some of these competitors are far more popular online than Zagat, and thus it's not surprising that they have better search rankings.

Will Google try to boost the ranking of pages, or otherwise integrate its content into the SERPs in such a way that competitors are harmed? Of note: online restaurant booking service OpenTable saw its shares drop significantly on the Google-Zagat news.

Of course, it must be observed that Zagat isn't Google's first potential conflict. From home-grown products like Google Finance to its acquisition of travel software vendor ITA Software, Google hasn't been just a search engine for some time.

But with prior products and acquisitions, there was usually more than just content. Google Offers is a local advertising platform, Blogger was a publishing tool, ITA Software's data and technology will be used to build services, and so on and so forth.

With Zagat, it has effectively bought itself content and not much else. Even if Google plays it safe (and fair), that may worry publishers in other verticals. If Google will buy a pure-play publisher for its content (and not for technology), how can it be said that it doesn't have both feet in the publishing business?

The Zagat brand may depend on its print legacy

The Zagat brand is still widely recognized, but online, it has watched as digital upstarts like Yelp have eaten its lunch (no pun intended).

According to Search Engine Land, Google has no plans to shutter Zagat's print operations in the near term, but is it realistic to believe that Google will keep Zagat in the publishing business over the long haul? That's questionable.

Which raises an interesting possibility: that Google will, intentionally or unintentionally, destroy Zagat (the print brand), but end up destroying the entire brand not recognizing that maintaining the print side is crucial to maintaining the brand itself.

Google has little to gain

At the end of the day, it's hard to see Google gaining more from its Zagat acquisition than it stands to lose. Google may officially be a publisher today, but that doesn't mean that it should be, or that it will do a good job.

Google's bread and butter is connecting individuals to information, and connecting advertisers to individuals. If it genuinely feels that it needs to buy a company like Zagat to do that more effectively going forward, it has big problems ahead.

Patricio Robles

Published 9 September, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (3)


Matthew Read

Not only one of the hardest but one of the strangest acquisitions Google has made.

I think, as the post points out, that it will be interesting to monitor their rankings in Google, especially compared to those of companies such as Yelp.

I wonder if Google will just pull a few levers to get Zagat to the top or if the will hire an SEO agency to help them out? ;-)

almost 7 years ago


Cyber Pundit, Principal at YWM Consulting

Yahoo has been a publisher and an ad network owner (with Right Media) forever.

The tech blogger peanut gallery is probably more worried about this than anyone in the real industry.

So. Next question?

almost 7 years ago


Cyber Pundit, Principal at YWM Consulting

@author: "If it genuinely feels that it needs to buy a company like Zagat to do that more effectively going forward, it has big problems ahead."

Could you elaborate on this logic some more? I couldn't find a real, meaty argument in your piece.

Google is investing in a platform for mobile. It has shown its intent by acquiring Motorola. Localization is a big part of this platform.

Do you have a *futuristic* model of how this should work? Not based on colors of the past. Who's to know what will succeed and what will not?

Why cannot a "search engine" of the past invest in creating an entire ecosystem that simplifies the USER EXPERIENCE. As Apple did with an iPod, then other devices.

Make that your focus of analysis instead of what a company's legacy has been.

True innovation comes from places where analysts cannot have conceived of. That's why almost all analysis is post-hoc, observing what's already happened.

almost 7 years ago

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