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Google snaps up restaurant site Zagat

Friday, 9 September 2011 | By Patrick Stafford
Google has purchased American restaurant review group Zagat, in a move that highlights the search engine giant's interest in user testimonials, as well as its considerable war chest for investing in small businesses.

Google, despite wanting to clear up a number of products that aren’t generating revenue, is seemingly willing to continue buying businesses that fit in with its core infrastructure and accompany its key products in the areas of search and mobile.

This acquisition comes just after Google announced it would be purchasing the mobile business of Motorola. But it has also continued to focus on start-ups, buying 15-month old daily deal site Dealmap early last month, along with loyalty card start-up Punchd in July.

The Zagat acquisition, which is rumoured to be in the hundreds of millions of dollars, also proves that Google is willing to spend substantial amounts of money on acquisitions that integrate with its core business.

“I'm thrilled that Google has acquired Zagat,” vice president of local, maps and location services Marissa Mayer wrote in the company’s blog.

“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.”

Zagat began in the late 1970s and started publishing books of restaurant reviews, with many submitted by readers. Since then they have expanded to over 100 cities and international locations including London and Paris.

But while Zagat may be primarily an America service, it nevertheless shows that Google is associating search results more and more with user-generated reviews.

More generally, there has been a push towards user reviews on the internet and attaching them to product listings. While eBay and Amazon started this trend, more businesses are now expected to offer a review section on their websites.

Reseo chief executive Chris Thomas says research indicates those users who see more positive reviews online may be more likely to buy. As a result, it means more businesses are becoming reliant on the reviews associated with their websites and what anonymous online users are saying about them.

“Certainly people transact on the basis of third-party testimonials, and those that see good ratings are more likely to buy something,” he says.

“There have been more reviews listed in Google search results lately, as there has been a change to the algorithm. Your eye is drawn to those sorts of results, with different star ratings and so on, so maybe Google is trying to buy into that.”

Thomas also says these reviews are being associated with Google Places. As users start searching for businesses closer to them, they will be able to decide which café or restaurant to visit based on the quality of the reviews provided next to search results.

“It all goes back to things like Google Places, and the more review data that is associated with search results.”

The Zagat brand has become one of the most trusted in the US, and over the past decade has put much of its content online. Earlier this year it also opened up its site to provide much of that content for free.

“Their surveys may be one of the earliest forms of UGC (user-generated content), gathering restaurant recommendations from friends, computing and distributing ratings before the Internet as we know it today even existed,” Mayer says.