High-Brow Food Goes High-Tech: Google Buys Zagat

Alliance could do wonders for Google Places and Google Offers

   
High-Brow Food Goes High-Tech: Google Buys Zagat

google logo High Brow Food Goes High Tech: Google Buys ZagatGoogle (NASDAQ:GOOG) just announced it will buy the venerable restaurant rater Zagat. Details still are sketchy, but the news has both foodies and techies taking note.

For consumers, the result could be the latest offering from a big technology company trying to have a very local impact — via deals or promoting off-the-beaten-path restaurants in your neighborhood that appeal to your tastes. For techies and investors, the Google purchase of Zagat is noteworthy because it means the tech giant is finding yet another way to extend its octopus-like reach into every facet of our lives.

Here’s a look at what the Google-Zagat alliance could look like:

For starters, rumors indicate Zagat was informally accepting buyout offers for a while. That’s because it is very much an “old media” company — think printed restaurant guides and coupon books. They just aren’t very relevant anymore.

Google was able to look at this antiquated model and see the future. In its corporate blog, Google said “Zagat will be a cornerstone of our local offering” — in other words, taking the authority of the restaurant reviewer and repackaging it with all the other high-tech products Google offers that are both tremendous in scale on the whole and tremendously focused on your own backyard for each user.

Google Places, its ratings hub that is akin to privately-held Yelp or other similar sites, aims very much to be a Zagat for the 21st century. In July, Google decided to purge nearly all outside, third-party reviews — from sites like TripAdvisor, Hotels.com and the like. It now appears that could have been in preparation for a focus on in-house content from this Zagat partnership — and effectively lock out the competition.

The Zagat name brings some weight to reviews, especially in the restaurant arena. This could be a great way to prime the pump for Google Places.

And in the spirit of Groupon, Living Social and other online coupon efforts, the tech giant can make big strides with its fledgling Google Offers business that launched this year. Many believe the space is wide open, with once-dominant Groupon losing its luster among many industry insiders and investors. Mixing reviews with the online community at Zagat.com, which already features some of the most engaged foodies around, could provide a valuable list of prospective customers for restaurant and travel deals.

The big question, of course, is what will happen to the physical Zagat books. Will Google muddle through, push them online or kill them altogether?

As I said earlier, things are murky. But whatever the specifics shake out to be, one thing is clear: Google Places and Google Offers are going to get some good momentum as a result of this partnership.


Article printed from InvestorPlace Media, http://investorplace.com/2011/09/google-buys-zagat-goog/.

©2014 InvestorPlace Media, LLC

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