Google and Zagat join forces

By Maureen Aylward

Google recently purchased Zagat, the publisher of review books for restaurant, hotel and other local attractions world-wide. Experts believe that this is Google’s way of acting on its quest to connect to local markets. Our Zintro experts were eager to comment on this collaboration. Here is what they had to say.

Susan Zechter, marketing and digital consultant and author of Celebrity HotSpots Los Angeles Restaurant Guide: Where Your Fave Celebs Dine, says Google’s recent purchase of Zagat signals that Google is looking to further diversify its business model and secure a stronger presence in local markets. “Historically, Google’s cornerstone has been search, serving as the middleman by directing users to specialized content. Additionally, it has focused on online services, such as Google Maps, that bring users into their franchise,” says Zechter. “While Google’s core competency has been search, advertising is where the vast majority of its revenue comes from. Therefore, increasing opportunities to gain advertising revenue is where the Zagat acquisition stands to be most beneficial.”

With the Zagat acquisition, Google can now generate a new revenue stream and compete for local dollars in a way they have never been able to effectively do in the past, i.e. via the Google Places program. “Sure, Google gets local ad dollars via search and AdWords, but having premium hotel and restaurant content will make it a destination site. It will be in a position to take dollars away from other content providers such as Yelp and OpenTable,” says Zechter. “As an added benefit, integrating Zagat content into search makes Google local search results more relevant. This aids Google in maintaining its leadership position in the search category and makes it robust for local searches, and this seems to be the only real benefit to the end user.”

Zechter thinks that Zagat provides one of the best chances for Google’s localized success as it is an advanced and credible brand in the interactive space and apps arena. The acquisition enables Google to ramp up and quickly benefit from Zagat’s market-leading array of tools and turnkey online/mobile solutions, especially the cool Augmented Reality app. “If Google can prove successful in integrating Zagat and keeping the quality of the content at its current level, it will likely use this as a model for expanding into other local business and service categories.”

Marcia Oortman, a senior policy advisor for recreation, says that Google operated mainly as a singular entity in global search and advertising, and with the strategic acquisition of Zagat, it can offer a total product to a highly differentiated and ultra-complex society. “Google can be the end destination for users instead of only function as a search engine and gather data. Now, people can search for facts and for quality information. Zagat adds an advanced social search engine. People stay longer on the Google site, while they spend time sifting through more localized and social content. This will attract local advertisers. With this Zagat purchase, Google can approach an entirely new market of advertisers and can expand its advertising efforts,” she says.

Lula Cassidy, a marketing CEO in the hotel and hospitality industry, says the purchase of Zagat by Google is substantial in its ability to connect to local markets and lifts Google’s potential to becoming a content provider. “Zagat is a long standing trusted source for hotel and restaurant reviews. The content it will supply Google Places and the added factor of exposure to Google users will only enhance both companies’ growth strategy,” she says.  “Zagat being the trusted source they are gives the best of the best. Google could provide user preferred search priority, eliminating the online consumer having to search poor reviews of hotels and restaurants in an attempt to find the best. Lastly, rather than directing Google users to third party review sites like Trip Advisor, Citysearch or Yelp, Google could feature Zagat’s ratings and reviews in Google’s users search results, in Google Maps, and even in mobile applications.”

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  1. […] Google and Zagat join forces Posted on October 5, 2011 by zintro  By Maureen Aylward […]

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