Zagat has recently made moves to expand their ratings from food / travel into new verticals - eg rating doctors.
Have to assume that Google foresees expanding the Zagat ratings quickly to all things local.
The Zagat "brand" resonates huge as a trusted consumer brand and having that rating attached to listings (exclusively) makes Google's search results more meaningful than competitors (the perception anyways).
This buy is something Yahoo or AOL would do. Google didn't buy a technology or a business model. It bought content, an address book, and a logo. Very un-Google.
If Google's technology isn't good to compete with Yelp and Groupon, what makes it think it will be any better after buying up someone else's operation that can't compete either.
To quote Vic Gundotra, 'Two turkeys do not make an Eagle'
I have to disagree. Not everything is about technology - Zagat has something that is highly coveted and difficult to replicate: a good reputation and critical mass.
Google (or any of us, for that matter) can spend all day building the greatest, fairest, most accurate restaurant review system known to man - but it will still be of utterly no use unless there is a critical mass of restaurants and customers who are willing to trust it and, more importantly, use it.
Bootstrapping a trusted content source is really hard (hard in the "nobody knows how to do it reliably" way, not just hard in the "it takes a lot of work" way). If you want to break into this market, simply buying said critical mass is much easier (and much less time-consuming). Whatever crazy technology you have can be layered on top.
Maybe it's my age (currently 23) But Zagat has a good reputation and critical mass?
I know Zagat as that magazine that fast food places brag about getting high ratings from (KFC ran commercials for a while claiming a #1 rating from them).
I am with you, I am 27 and really had no clue what the heck Zagat is. I knew they reviewed food places, but why they are trusted or why I should care? I am more interested in my co-workers opinion.
I don't see this as a great purchase for Google either. They already put business reviews from other websites on their listing pages. I have seen Zagat ratings on various pages. Why couldn't they just pull it in also instead of buying the company?
28..always been aware of Zagat. Who knows, travels, what you read, etc. Zagat rated over the last few years has definitely seemed to not be as indicative, as before, of the highest quality of restaurant.
oh man. The first time I saw a "Zagat rated" sign I was so confused. "Is this some sort of 'American Psycho' tie-in? why would an upscale pizza place pay to be related to that book?"
I was certain zagat was made up by Ellis for his book.
I'd never seen it until I moved to the bay area, where a 'Zagat rated' usually means "Yes, this is a chain, but we pretend really hard that it's not fast food."
Somewhere in Google is a list of search categories that is sortable by search volume and adwords revenue. While the anti-trust implications probably are scary to them, they are chipping away at that list.
Weather search? Google gives you weather info right in the SERP. Stock search? Same thing. News search? Hrm.
Restaurant search? Why hand all of the revenue from these search results to advertisers and only take a slice of it for the adwords (or NONE from organic results)?
If a lot of people search for it and companies are making money, Google is at least discussing whether they should own the content/service at the top of the search results.
> The Zagat "brand" resonates huge as a trusted consumer brand
Only because they focus on a niche. If they start expanding their ratings to other areas, it could weaken their brand. Rating doctors? Unless we're talking Beverly Hills plastic surgeons, I'd have trouble taking them seriously.
Why? I trust professional reviewers more than I trust random disgruntled customers. Because some doctors are better than others, professional reviews could be useful information.
The most troubling aspect of Google these days is the shift from passively indexing the work of others (Google crawler) to deliver relevant ads and search results, to owning the data itself and granting access (G+, Zagat, ITA).
Doesn't strike me as an apples-apples comparison. Some data is not free. The web is decentralized and anyone can request a URL and maybe get a response. Not all data sources are like this. ITA doesn't own the airline data -- it receives feeds of it from the airlines. That data costs a lot of money. I would also imagine that Zagat reviews cost money to create and aggregate.
Let's think about it. Instead of buying Zagat, Google could propose a distributed protocol (or microformat/schema for HTML) to publish a review and then they could just wait for it to catch on and then crawl that. But that is not going to help users today. Plus they've already scraped reviews from other sites and that just caused those sites (Yelp) to become very upset that their reviews are being shown on Google place pages (despite the fact they could always robot-out Places specifically).
Encouraging high-quality content on the web is not out of vogue at Google -- this would be silly because the #1 reason people still use Google is to find content on the web. However, it's not surprising to me that given the option to improve Google local quality today they would make an acquisition like this. If you were in Marrisa Mayer's position, what decision would you make?
The problem is Google is now too big and too much of a lawsuit target to get away with aggregating other people's data any more. Web Search is the ultimate aggregation of other people's content, and it's a good thing it's already invented because it would never get off the ground today. Crawling other people's content? Lawsuit. Linking? Lawsuit. Cache? Lawsuit. Allowing searches on trademarked terms? Lawsuit. Snippets in the result page? So many lawsuits! Using user click/query data for Suggest and/or ranking? Outcry in the EU. FTC launches investigations; DOJ sues. Congress steps in; Google forced to back down.
I completely agree. For most of the life of google they have claimed that they are NOT a content company. It's a conflict of interest when a search engine has their own content to push.
How is it a conflict of interest? When a company that was founded on the idea of an algorithm that delivers the best content for a search instead starts displaying their own properties (youtube, maps, reviews etc)... well that's a portal now, not a search engine. Conflict.
I don't understand how it's a conflict of interest. OK, they now create content in addition to searching other people's content. The goal of Google is to "organize the world's information", not to be an independent source of search results. They are a company who gets money when you use their website. Producing content for your visitors is not a "conflict of interest", because Google has never claimed to be acting in any interest other than making money.
The only interest that would conflict with Google's is one that made people stop using their website.
Google’s problem, at this point, is that a lot of the “others” being “passively” indexed are spammers trying to game its algorithms. Google would be foolish not to leverage its money and its brand recognition to find ways to work around this problem with curated data. A link from a page with a trusted author is worth a hundred or more links from pages that are just randomly found by a crawler.
(Disclaimer: I work for Nokia, which competes with Google on geographic search.)
I used to think this was troubling as well, as I assumed that it would mean new businesses would have trouble competing. But based on the poor results of initiatives like Google One-box (music), I don't find it troubling anymore.
Other than the ability for others to compete, is there another reason you find this troubling?
I think it's because the content creators have not been completely OK with Google using their content (see News, Books, etc). Google's mission is to organize the world's information and to do that you need access to it.
Good to see. Zagat's had problems finding a great business model in the digital world. They've gone through ads, memberships and endless partnerships. Zagat is still the prestige name in local reviews though. This is a great resource for Google's efforts in the local business market.
I love Zagat's core business idea — they were a significant inspiration for our LA Life neighborhood ratings. In fact, I've been looking at opportunities to do similar capsule reviews but creating them using existing reviews from other sites instead of survey data. I have to think this is where they're moving now as a part of Google, but it's not like I'm a Google VP.
This all seems to make sense. The Thomas Bros. map books were ubiquitous in California when I was growing up but have basically been replaced with Google Maps. Now the old burgundy Zagat guidebook is going this way. Glad to see Tim and Nina and their team will have a guiding hand in its replacement.
Google could out-Yelp Yelp with this move. Zagat is certainly a more trusted brand than Yelp; and has none of Yelp's unsavory reputation. (All those "don't buy an ad and get bad reviews" stories.)
Keep digging that moat, Google. As has been the case throughout history, the guy with the biggest moat wins, right? Oh wait, nope, that's not it. It's the guy who figures out how to bypass the moat who wins.
Google, please go back to innovating. People like you because you do new and exciting things, not because you have your hand in every business sector. Giant acquisitions like this and MoMo help nobody.
Edit: I'm not trying to say Google shouldn't protect their business, but I, at least, would prefer them to do it through innovation rather than buying giant companies.
Google already links to Zagat in their places reviews. This is Google buying a large and influential slice of pie to make it harder for others to compete.
...which is exactly what they're doing, right? By having let's say a Yelp competitor, they have an entire market that can be described as "anyone who eats" out at their fingertips...
I hope Google can maintain the quality of the Zagat ratings while simultaneously making them freely available – presumably this will be used to compete with Yelp, and I'm hopeful that it'll be useful.
Agreed. The best part of Zagat reviews (at least the core reviews in their guides) and what makes users like me rely on them is that they're curated -- the editors collect survey results from a wide variety of (relatively) trusted diners and summarize them.
The problem with "mass" review sites like Google Places or Yelp is that they're reactive -- they don't solicit reviews (and in fact discourage that in some cases). So people generally review only when motivated to do so (either positively or negatively), giving a relatively unbalanced result.
Hope Google can keep the Zagat spirit alive and well...!
Only Yelp can say, but I think that Google's acquisition strategy seems to pretty clear: "If we can't buy you, we are going to buy one of your competitors." The questions you'll need to ask yourself when Google comes knocking are:
1. How much do I respect my competitors?
2. If Google does get them, will they do better or worse?
It's not a matter of hoping Google will go away. Once they've signaled intent to be a part of your business, you can be sure they will, one way or another.
I thought it was "only" $500M, but regardless, they're clearly gunning for an IPO. Hard to say how that will pan out, though. LinkedIn has an $8B market cap, but Groupon's IPO seems stalled.
I don't really understand why they dropped Google Hotpot. I mean, it's still there, but there doesn't seem to be much movement or promotion there.
Zagat employs people to actively review restaurants. That's fine for people who have the same taste as Zagat, but it's only one filter and arguably not very scalable.
Hotpot otoh is more like Pandora for restaurants. I rate restaurants and it gives me recommendations for stuff that aligns to my taste as calculated from others who share my taste. It provides a much better filter and actually gets better as more people use it, which is the best kind of scalable. This also seems like a more innovative and Googly way to do this.
Hotpot merged directly into placepages -- I see my reviews and reviews from my friends on local pages (it's a really nice experience). I think to get a full picture of a restaurant you might care about:
1) reviews from your friends (hotpot)
2) reviews from food critics (zagat)
3) reviews from the general public (yelp)
So it makes sense to me that hotpot will continue to live where it is (and most likely get turned into a +1 sort of thing so that it can also work with G+)
> Zagat employs people to actively review restaurants. That's fine for people who have the same taste as Zagat, but it's only one filter and arguably not very scalable.
It's not like there's one person per city, Zagat uses input from tons of people. It's also consistent, you don't have to wonder if the glowing review was written by the owner like you do on Yelp. Zagat gets people to pay for access to their reviews, that in itself should tell you something. Even better, Google will surely make them free, likely with some innovative tie-ins with Maps and Places.
Yelp started out paying people to write reviews. Not everyone, of course, but when they wanted to move into a new market they'd hire people to start "seeding" the area with reviews. When they had enough traction, they could stop. Zagat may do the same when they reach some critical mass. And if they hire professional food critics and mark them as such, I'd be OK with that.
It's always been confusing to me why Google couldn't come up with a better ratings and review system for local businesses. Google Maps is great on the web and mobile, and they've got millions of users. But still Yelp beats them with reviews, and Yelp isn't that great anyway. But Google buying Zagat means that they're getting more serious about the space.
Yelp's unique value and innovation has been in finding ways to psychologically reward users for submitting reviews.
They work hard to make the user feel like they kick ass at reviewing places. More recently, they also work hard at crooked schemes to blackmail hard-working business owners if you believe those reports, which I certainly don't. But they started with finding every way to make their review writers feel valued.
These days, people who seek to engage users like Yelp has done for years do it in the name of "gamification". It should be done just to give people proper feedback for having written a 500-word review for no money.
I absolutely believe the reports of yelps blackmailing actions. I've personally met 2 business owners that have been contacted by yelp. Both accounts were very similar. They threaten to remove the businesses current exposure level if some arbitrary fee isn't paid monthly and they offer to remove any negative reviews for an additional fee.
I like this move for Google, but I'm concerned it will just become a me-too move.
When I want to find something to eat close-by, Yelp is perfect. Yes, Zagat integration takes away the need to switch from Yelp to Google Maps to get directions, but that's not a big pain point for me.
It's definitely something cool to add, but I'm not sure it will be as effective as they think it will.
Couldn't they have easily done this before? Couldn't they lower sites for not using all of Google's colors in their color scheme? Couldn't they do pretty much anything with their search results that they want to? Why does buying a company make this more or less relevant?
Applying Zagat's methodology, HNers generally "like this move strategically", and think it's "good from the PR perspective" to buy "the prestige name in local reviews". Some think it's a "me-too" "un-Google" buy of a company with a "not very scalable" model.
HN Rating: 23/30
My question is why is Opentable stock down so much on this news? How serious is Google about getting into reservations? If this is anything like what they did in NFC payments space with MasterCard, they'll likely just try and ride Opentable's rails instead of trying to build out their own. Maybe do some sort of data share agreement to better their idea of how successfully they are able to close the search/discovery to successful reservation loop.
I just cant imagine Google wanting to go out to each of these restaurants themselves...a very difficult proposition, even with Zagat's team.
I think it's a good move. (And congrats to the Zagats for executing the sale they couldn't make happen a few years ago)
However, I think it'll bring up an interesting point that we'll begin to see more and more of as Google continues to acquire companies - will they leverage SEO to make their own constituencies appear higher in search results than their competitors (i.e. Zagat higher than Open Table, Yelp, etc.)? Where does that fall in the ethics/morals side of things?
Interesting that if you own the means to information, you can choose what information people find (and thus, the decisions they make).
My 2-3 experiences with choosing "Zagat rated" places were not particularly good. Three years ago I chose a rated restaurant in Philly and took friends there only to find the place had shut down (the Zagat sticker was still on the front door). A couple of times in NYC, I found Zagat rated restaurants to be mediocre. In general, I'm not convinced about these rating organizations, including Yelp. Maybe Google can improve it.
When I first heard about Zagat I thought it had potential. However I've eaten at a lot of lousy restaurants which have had the Zagat logo proudly displayed in the doorway.
I associate Zagat with mediocre restaurants and a de-emphasis on food quality in favor of decor, etc. In other words, a Zagat sign on the door is a neutral or negative signal in most cases.
The problem is that the fact that a place is "Zagat rated" doesn't tell you a whole lot any more than "reviewed by The New York Times" tells you much. The Zagat rated logo doesn't tell you what the rating was. In any case, tastes differ and restaurants change--though overall I find Zagat to be pretty reliable subject to the limits of a few aggregated numbers and short quotes from reviewers.
This makes sense to me. For a company that wants to "organize the world's information and make it accessible and useful", sometimes it's great to have the foremost team of experts on restaurants. Who knows what else they'll branch out to.
Plus the brand is trusted, so it's a good move from the PR perspective alsy.
On a slightly unrelated note: I love reading something linked from HN and then far later receiving a NY Times email alert about the same story. HN FTW.
I don't think this purchase is the primary 'Yelp-killer'. Yelp's product just isn't good enough, the iOS app for Google Places vs Yelp is a great example. Places gives me search and a set of location categories (like restaurants and gas stations) on its home screen, Yelp offers 'nearby' and a bunch of social features.
Admittedly I haven't tried as their site runs off a "pay to see the full content of this review" model.
The Michelin Guide is actually a 'bunch of reviews written by a handful of writers', which isn't a bad thing in my opinion. Every restaurant I've been to that's even been Michelin rated has been superb.
It is interesting to note that the Michelin Guide itself orignated as a complementary marketing tool -- Michelin makes tires, and wanted people to use their cars more. So they compiled a list of places people might want to go, and added the reviews to make them even more attractive.
Zagat has always used a crowd-sourced model, collecting customer reviews and publishing them in book form. They haven't really adapted this as well online (I'm sure this is where Google will give them a huge boost), but their approach was always UGC before people talked about UGC.
Zagat's reviews are based on consumer surveys, not paid reviewers. They were doing user generated content long before anyone called it that. Their full name is actually Zagat Survey, LLC.
More info: http://www.zagat.com/about-us/how-we-survey
Zagat has recently made moves to expand their ratings from food / travel into new verticals - eg rating doctors.
Have to assume that Google foresees expanding the Zagat ratings quickly to all things local.
The Zagat "brand" resonates huge as a trusted consumer brand and having that rating attached to listings (exclusively) makes Google's search results more meaningful than competitors (the perception anyways).
Smart.
Reference - http://www.prnewswire.com/news-releases/wellpoint-taps-zagat...