If you’ve been keeping up with Google, you may know that it recently acquired Zagat for an amount that has yet to be disclosed (estimated to be under $66 million). The search company adds a brand to its portfolio that has been a major force in the restaurant review sector for decades. Google is planning to use Zagat to beef up its local product, but overall this acquisition could have major implications for the online review game and all the players in it.
A Budding Rivalry
Whether or not Google has it out for Yelp (which it tried to acquire unsuccessfully for a reported $500 million back in 2009) is debatable, but it is very likely that Yelp will be affected most by the Zagat acquisition. And while some observers are suggesting that the company has every right to be shaking in its proverbial boots, the San Francisco-based review service doesn’t seem too concerned about having new competition in the market. In fact, Yelp CEO Jeremy Stoppelman called the acquisition a “funny move” while going on to hint that Google could have its hands full with search, Google+, Android and everything else it is trying to perfect at once.
Despite the CEO’s cavalier approach to the situation, Yelp could very well have a fight on its hands from the biggest competitor it has had to deal with to date. According to Marissa Mayer, Vice President of Google’s local, location and map services, Zagat will serve as the foundation of its local product, which will be fueled by the review firm’s huge existing database of trusted reviews. This is in comparison to Yelp’s user-generated system, which has been heavily criticized for suspected unethical practices between the service and local businesses that use it. Consequently, Yelp’s increased value as a business tool has resulted in its reputation taking a hit due to an increasing amount of spam.
Google has a lot going on, and adding Zagat to its product line is only a small sample. It was recently announced that the company had agreed to purchase mobile device maker Motorola Mobility. The acquisition is still pending approval from American and European regulators, but if the deal does go through it would help the search giant expand its presence in the mobile sector and likely gain even more visibility for its market leading Android operating system. With its focus set on local, social and mobile, it is clear to see that Google is quite serious about making an impact in some of the hottest fields going today.
Seeing that Google has so much on its plate, it is easy to understand why some pundits are questioning whether the internet powerhouse is biting off more than it can chew. Is Google in over its head? That remains to be seen. However, if the company is able to successfully pull off such a potentially chaotic balancing act, its current importance in the digital world will magnify tenfold.