In a Twist, Google Reviews Zagat, and Decides to Bite
Michael Falco for The New York TimesTim and Nina Zagat, who began their restaurant ratings more than three decades ago, will remain with the business.
For years, a wave of online competitors eroded Zagat’s formidable empire of quotation-mark-happy reviews of restaurants and bars around the world.
But on Thursday, Zagat found an ally in the biggest online giant of all, selling itself toGoogle.
The deal will unite Zagat, whose burgundy-covered guides were among the first examples of user-generated content, and Google, which has made local services one of its highest priorities.
Terms of the deal were not disclosed, but people briefed on the matter said that Google had paid $100 million to $200 million. Tim and Nina Zagat, who began the company by compiling restaurant ratings from friends into slim surveys more than three decades ago, will remain with the business.
The deal will most likely mean a lucrative payout for the Zagats, as well as for theprivate equity firm General Atlantic, which bought a third of the company in 2000. But it also raises questions about how Google will integrate Zagat, whose main offerings include its popular paper guidebooks and a paid subscription Web site.
Local online advertising is an increasingly lucrative market, one that analysts estimate to be about $140 billion a year. Google estimates that about 20 percent of its daily searches are for things that are nearby, and that percentage is even higher for queries made on mobile phones.