Before anyone else, Zagat saw an opportunity in compiling and publishing reviews for restaurants. They were really a pioneer in user-generated content. Recently, however, Zagat was left behind as other digital start-ups like Yelp and Urbanspoon were able to provide and promote reviews to consumers very effectively.
A few months ago, I asked whether Google was planning on taking on Yelp when Google removed all third-party reviews from its Places page. Google’s acquisition of Zagat provided the answer. The acquisition will affect search marketing in a number of ways, such as fueling Google with more content to distribute to people performing local and mobile searches. Here are potential impacts of the deal:
- Local restaurants familiar with the Zagat name should be thrilled. People are familiar with Zagat, and restaurants should encourage their patrons to review their experience on Zagat, knowing that this content will likely be shared on their Google Places page.
- Zagat’s review content will likely be injected into Google’s search properties including Places and even potentially the recently beta-launched Hotel Finder. This content will vastly improve the credibility of many Places pages that were left without reviews when Google pulled the plug on reviews from third-party sites.
- Google will also be able to take advantage of Zagat’s foothold in mobile. The company’s review platform is available as an app for most Web-enabled handheld devices. Mobile is easily the fastest growing segment on the Web, and now Google has even more content for people performing local and mobile searches. Zagat’s categorization of restaurants really lends itself well to Google’s location-based mobile search.
- Zagat also has a deals platform. The company currently offers 30% off to hundreds of restaurants in several major markets across the country. Google has just started exploring the deals frontier, and the acquisition gives Google more options.
If Google can connect the dots among Zagat’s users, their reviews and Google+ accounts, then Google could potentially deliver recommendations custom tailored based on their preferences and other social signals (like who they visit restaurants with, the types of places they frequent, etc.).
One important feature of this deal that has been overlooked by a lot of other people is that the quality of Zagat’s reviews are much higher than the reviews published by their competitors. Zagat’s review process is very different from the reviews published elsewhere. Zagat stresses that the reviews come from verified users, and comments from Zagat’s user base are reviewed and curated by staff members.
The company says its process ensures higher-quality and more trustworthy reviews. Local businesses can attest to the inaccuracy of reviews on many third-party sites that lack a process similar to Zagat’s.
Google is not done buying review and recommendation sites. I expect them to make a similar purchase for another review vertical such as travel. A candidate who was in a similar position to Zagat makes the most sense. Zagat put itself up for sale for $200 million in 2008, but there were no suitors. No doubt they welcomed the Google purchase with open arms. The question now remains, what other review sites are in Google’s crosshairs?
