Google’s unloading of Zagat this week to The Infatuation, a local reviews site, is seen by some as “Finally!” and perhaps, the final vestige of both paywall-protected review content, and Marissa Mayer’s unsuccessful tenure as Google’s head of local (2010-2012).
It certainly makes sense for Google to move on from Zagat. For better or worse, review sites are morphing to an “open garden,” multi-sourced environment. While there is a lot of room for improvement, reviews are increasingly integrated with business location, business data, professional reviews, promotions and content marketing.
Was it a stupid idea for Mayer to buy Zagat and plan to use it as an anchor for Google + Local at the time of the acquisition in 2011? It’s not so black and white. Zagat theoretically provided Google with high quality reviews in 100+ markets. Zagat’s highly advanced, 30 point review system was unmatched in the industry.
The $151 Million price, however, was probably too high. While Zagat had previously been shopping itself for $200 million, it never got serious bidders. It had also previously failed to IPO. With founders Tim and Nina Zagat retiring, the company wasn’t posed to grow further and become a JD Power-like reviews powerhouse.
Indeed, at the time, Zagat was struggling to grow its $4.95 monthly online access service. The outlook for its private label business was also unclear. It had made licensing deals with Wellpoint/Anthem, Priceline, Diageo liquor…and Google itself. But there wasn’t a stampede to use these services. Zagat also wasn’t growing its premium, print-based local guidebooks; or its Groupon-like Zagat Exclusives coupons.
Whether Google paid too much or not, Zagat’s content — and brand — were ultimately never fully leveraged. Zagat did, however, play a valuable role in populating reviews for Google map locations. More importantly, it helped Google go on the offensive against Yelp’s comparatively thin, less verified and lower-end reviews. It also helped Google position itself against the emergence of other user generated content players, such as Groupon and the Yellow Pages companies.
Zagat’s unloading — along with the defanging of Angie’s List last year with its sale to HomeAdvisor — reflects something else: the end of closed wall, premium review services; and complex, user generated review templates that took several minutes to fill out. Neither Zagat or Angie’s List proved able to stave off the crowd-sourcing revolution.
But let me ask you something: Won’t you miss them when it comes time to plan a reservation at a 3 star restaurant, or hire a garage door repairman? We haven’t got good substitutes == yet.