Google Acquires Zagat !

http://dealbook.nytimes.com/2011/09/08/google-to-buy-zagat/

What’s Next?

Yes I thought that was pretty fascinating. A couple of other articles:

http://www.geekwire.com/2011/google-gobbles-zagat
http://www.shankennewsdaily.com/index.php/2011/09/08/1511/google-acquires-zagat-restaurant-guides-opentable-stock-off-8-percent-in-late-trading/

Don’t get any ideas

Haha, don’t worry. Also, the ‘driver’ for this deal was the LOCAL aspect of ZAGAT. CT is not really remotely comparable or relevant from the perspective of that filter.

People ask me all the time what my EXIT is, and I tell them it’s a sign over a door. I built CT, because I needed it. Right now there are something like 60,000-70,000 collectors actively tracking nearly every bottle of wine that they touch. The very last thing I would want is to sell it out and see someone screw it up or turn the dial on monetization to the detriment of the community. I want people to use CT for a lifetime of wine collecting. How many web properties are likely to remain essential to someone for 20, 30, 40 or more years? (I already have people who have been very active on CT for 8+ years.)

If one were to look at potential ‘elephant’ acquirers, a much more obvious one is actually Amazon. They have done this in the past with both IMDB.com (movies) and DPreview.com (digital photography). They clearly value user reviews and their ability to help rive purchase decisions in information intensive categories. However they are not shopping for wine properties, although I do think it is a foregone conclusion that SOMEDAY they may well be. That said, I am not for sale, not looking for investors, and not looking for acquirers etc. In 2005-2007 there were a lot (7) serious approaches around acquisition, JV, investment. People nicknamed me the runaway bride for always getting cold feet. I finally came to terms with what I wanted and did NOT want.

All that said, I would be a fool to ignore the landscape and not pay attention. And one learns to never say NEVER. However I have also heard of far too many dream acquisitions that sucked the life out of the founders, the website etc. (RecipeZaar is one that comes to mind.)

Sorry for the ramble.

This is probably being discussed on the news story links being cited above vs here - but unless Google is going to make the service free, is this really much of a story? Admittedly it’s been years since i’ve read or used Zagats, but aren’t they simply the classmates.com of the web2.0 restaurant world?

Eric, i’ve only been with you 7 years, but glad you are staying put.
You got the model right obviously.

Jim,

It’s seen as a play to strengthen their local services. There’s a significant feeling that local search is a growth area in general (and by local search I mean “connecting people to local businesses” not just the ‘type words in text box’ search). One thing people search for a lot are restaurants - that’s mostly what has driven Yelp’s growth. This gives them the ability to easily add reviews to their Places product and to add information in web search.

The concern over this move by Google is both specific and general… the specific concern is that Google will artificially alter search results so that appear at the top of the search results page (which, of course, violates all of the “we return the most relevant results” stuff) while the general concern is that this is their first move into a content vertical. If you’re a content player, this has to worry you as Google has a lot of power to shape search traffic.

An interesting possibility though is that if people start seeing the first page be dominated by google results, we’ll trust the results less and move to Bing etc. One of the hallmarks of Google comared to other search engines early on was that it really did return highly relevant results first. Yes, the ads appear at the top, but the organic results were excellent too. Bias this too much and I wonder…

Yeah, actually just spent 5 mins on the site - had not been there in years.
The free site is fairly equivalent to Urbanspoon - you get % ‘liked’ and access to the reviews and restaurant info.
Not sure what you get for the pay service beyond the 1-30 point system for food, service, decor (plus price) - and all the accompanying filtering.

Guess we’ll see what happens on the rest. When I search using googs I rarely if ever see Zagat’s link on the first page. A ‘places’ hit is more frequent. If there is a hit on places doesn’t it already come up first under the paids or the actual restaurant site (if there is one) ?

I tend to use the yelp iPhone app when actually out and about. It seems to be more complete and have better map links than Urbanspoon. Over the years i’ve gotten used to calibrating myself to the kids reviews - 1 star because of bad service when I showed up with 8 friends and no rez at 8pm on Saturday, blah, blah.

Hardly the first. To whit, Google for a recipe and look at the special search UI on the left. I would contend that is getting pretty specific and vertical albeit with a focus on specialized search UI.
http://www.google.com/search?q=beef+stroganoff&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

Jim, I totally agree with you. I don’t find much use for zagat anymore. Between chowhound, yelp, and local sites like http://portlandfood.org I get more value and far more current reports than Zagat is capable of.

Perhaps Google has a game plan to make them relevant again. Time will tell.

Steve

You’re funnin’ me, right? That’s just a faceted search UI… none of the content is from a Google owned company.

Rick, not funnin’ you.

However I think this menu example is a precursor to deeper vertical integration. You are right for now, but I think that Google has already tipped their hand. If you buy into that view then the Zagat acquisition is less of a new step than you suggest. Again, I think you are right for now, but I am just choosing to read between the lines a bit more. I could be wrong of course.

This is what google uses to crush groupon in the restaurant trade. The question I have is what is the Zagat for the other popular Groupon models? They are now targets for acquisition.

After watching Parker go after you the past several years in light of your prior friendly relationship, I’ve concluded that CT is the primary reason why. CT ate his exit-lunch. Think about it. The Wine Advocate has some value as a going concern without him, but if there were no CT and only My Wines, that my friend would be a whole 'nother level of 401k. While he and his investors were waiting for the code writers to build an inferior tool, you smoked them. Cost him millions, I bet, even at a low multiple. But, I’m sure you know all that.

Mark, I actually think the Internet ate Bob’s exit lunch, not CT.

Do you remember AOL circa 1995? Among other things, they had developed a huge amount of proprietary and reference content behind their pay wall. Flash forward 5 years to a world of Google and Wikipedia, can anyone imagine paying money to AOL to access their content? No chance. They just became a crappy on-ramp to the Internet.

I am sorry to say this, as I enormously value the role that professional wine critics play. (I especially love those critics who put their paying customers first and allow them to see content on other sites like CT.) Nonetheless, as the Internet allows millions of wine enthusiasts and collectors to connect, it is inevitable that peer recommendations will play an ever-increasing (but not solitary) role. If the primary value one delivers to the world is locked behind a $100/year pay wall and represents the opinions of a tiny handful of experts, well there will be some additional pressure on your business. Whether CT is the vehicle or some other site, the phenomenon is utterly inevitable. Maybe I’m the one with the proverbial knife in my hand, but if not me then it would have been someone else.

FWIW, MyWines was announced in 2006 some 6 months after Parker’s folks, his investors actually, failed to secure a deal with me. (They were pushing a very limiting private-label deal that among others things would have precluded me working with any other reviewers, and it fell apart based upon my insistence on a grandfather clause for my existing relationship with Steve Tanzer.) And I had been bugging Parker’s folks going back to 2004 and only went to Steve Tanzer in 2005 once I concluded that Parker would never budge.

Eric,
You are being too modest. At some point, someone would come up with something, BUT, you have a unique and sophisticated convergence of wine knowledge and software expertise. And the time, drive, and facileness to take CT where you want it to go and where your community of users wants it to go. If Parker had your intelligence or humility (pick one), I suspect that we wouldn’t be having this conversation.

As you know, I am not an active CT user, although I do have an account (or maybe more than one). But that is going to change as soon as I can get Smith to integrate my cellar inventory and commit to keeping it integrated at a reasonable cost. My Smith spreadsheet, which is an exponential upgrade from my hand-written steno pad cellar book and still doesn’t include my catastrophically messy home cellar (because I am too embarrassed to let anyone see it), has become too cumbersome. And CT is the easiest way to catch-up reading back issues of Gilman.

Modesty is important, but I mean everything I said. The wave described above is INEVITABLE. I was perhaps lucky and uniquely qualified to see the opportunity when I did, but someone else would have eventually.

Happy to share email or PM on Smith. They are quite familiar with CT and have put some folks on there.

Eric, never forget that luck is when preparation meets opportunity. You may be lucky. But understand why.