Direct Line Blog

Food fight: With trendy Yelp booked, Google settles for musty Zagat

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If you can't get into Momofuku, then Gray's Papaya will have to do.

Google finally sated its appetite for a local-reviews superbrand yesterday with the acquisition of Zagat, the granddaddy of armchair critics' guides. That's granddaddy, as in really, really old.

Back in 2009, Google famously tried and failed to gobble up the much spryer, much cooler Yelp – for the only-they-could-afford-it sum of half a billion dollars. This year, Google was caught, um, "borrowing" Yelp's reviews on one of its apps. (“Restaurant Wars” doesn't have anything on these guys.)

Now having moved on from that dysfunctional relationship, Google has cast its lot with Zagat, and sure has high hopes for the dusty old enchiridion of hash slingers. “Zagat will be a cornerstone of our local offering – delighting people with their impressive array of reviews, ratings and insights, while enabling people everywhere to find extraordinary (and ordinary) experiences around the corner and around the world,” Marissa Mayer, Google's VP of local, maps and location services, wrote in a company blog post.

What's interesting about this from a direct-marketing view is the deal's potential impact on the already-(over?)saturated digital coupon marketplace. While both Facebook and Yelp last month killed off their daily deals programs and as the category's 800-lb. gorilla, Groupon, continues to attract bad press like a bowl of chocolate soup draws gnats, Google is expanding its Google Offers, which just this week hit five new cities, with plans to set up shop in 27 more.

“I'd be shocked if it wasn't part of Google's strategy to get into the deals business with restaurants…or to have that somehow as a component of it,” Gordon Borrell, CEO of research firm Borrell Associates, told our Tim Peterson for his story on the Zagat acquisition.

But just how rich a category is online restaurant advertising anyway – and does it really call for a food fight?

Borrell Associates estimates that local eateries will invest a grand total of $382 million online this year – or, about what Oprah lays out on snacks for a road trip with her best friend Gayle. Compare that to, say, real estate firms, which, despite the still-gimpy housing market, will spend $7.8 billion (that's billion, with a “B”) on online ads over the same period, according to Borrell.

Like standing in line for an hour and a half at Shake Shack for a greasy hamburger, one has to ask: Is it really worth it?
 
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