Tag Archives: Zagat

Google Buys Zagat: Reviews Platform is the Focus

Google’s march into local reached another milestone today with the acquisition of Zagat, a major, international provider of high end restaurant and lifestyle reviews in 100+ cities.

Zagat remains a major player in a reviews space it pioneered in 1979. In addition to hosting its patented “30 point” reviews from some 350,000 “surveyors.” Zagat has a print, pocket-sized restaurant directory product that is often sold as a sponsored corporate giveaway. Online, it provides “Zagat Exclusives” deals using the Reach Deals platform, and also, widely integrates its reviews with key players for more traffic, including UrbanSpoon, OpenTable and New York Magazine.

While Zagat is protective of its premium firewall, a February relaunch included more free content. The company also has very active smartphone apps. In 2009, the company also started expanding its platform to medical reviews via Wellpoint/Anthem Insurance; part of a broader licensing effort that also included Priceline, Diageo liquor…and Google.

In truth, however, the closely held, 110 employee company was slow to react to the Web, and has basically underperformed, opening doors for companies such as Yelp and UrbanSpoon to gain a foothold, especially among younger audiences and with more mainstream restaurants. Zagat had tried and failed to sell itself for $200 million in early 2008, but apparently did not find real interest at that price point.

Google’s failed effort to acquire Yelp in 2009, in fact, probably set the Zagat acquisition in play – as did the retirement age of founders Tim and Nina Zagat. We believe Google will focus on the reviews platform, and the archive of reviews, and probably de-emphasize the premium products.

Zagat Dives into Local Health Ratings With WellPoint/Anthem

Zagat, the publisher of consumer reviews and guides for restaurants, nightlife, hotels and attractions, has licensed out its name and reviewer system to WellPoint. The health care insurer will publish Zagat-branded health reviews for its WellPoint and Anthem BlueCross customers, reports The New York Times.

The product extension for Zagat, which has local guides in major cities around the world, is the first rollout of a broad licensing deal that Zagat made in January 2008 with WellPoint (which owns Anthem), Google, Priceline.com and Diageo, the liquor conglomerate.

New York-based Zagat has 110 staffers after layoffs of 19 workers in December. Paid Content reported that the company had hired Goldman Sachs to find buyers in early 2008 but backed off when it couldn’t attract offers close to its target of $200 million.

Under terms of the health deal, WellPoint is in charge of summarizing and presenting consumer health ratings, which will be mostly behind its member login firewall. Currently, The Times reports that the reviews have been rolled out to two million WellPoint and Anthem members in southern California, Ohio and Connecticut, as well as 3.7 million Blue Cross and Blue Shield customers in North Carolina that aren’t unaffiliated with Anthem or WellPoint.

WellPoint said it planned to add health reviews in San Francisco, San Diego and Sacramento this year and eventually at other WellPoint and independent Blue Cross plans. The rollout follows other “inexpert” health rating rollouts by others, including Healthgrades.com, which is syndicated by several newspapers, and Angie’s List, which launched its service in July and is selling advertising around the health reports.

There has been a sense of caution around consumer health reviews, and both services caution that users should only use reviews as a “supplemental” resource. Mike Rutz, who is the architect of Angie’s List health strategies (and speaking on Day 1 of Kelsey’s Marketplaces conference March 16-18 in LA), told us that consumer reviews have proved to be meaningful for health since wellness is greatly impacted by such issues as a doctors’ bedside manner, office hygiene, staff attitudes and other things that can be readily observed by patients.