Zagat: Perennially Profitable, Endlessly Reliable
While Zagat's impressive archive of crowd-sourced reviews and extensive online offerings were certainly considerations in the recent purchase, its most valuable asset is its unassailable reputation. Some aspects of its editorial process -- notably the highly-trained staff that culls pithy excerpts for inclusion into Zagat's distinctively quote-heavy reviews -- have hardly changed over the 32 years the company has been in business. But other mechanisms are constantly evolving to defend against cheating on the part of overly-devoted patrons or underhanded restaurants. For example, Zagat employs an estimated 30 proprietary filters that test for repetitions, oversubmissions and other suspicious behaviors.
The combination of tech-savvy filtering and old-fashioned editing has yielded a highly-regarded review structure. Tim Zagat noted that his company's reviews are well-nigh unassailable: "We believe that our content is the highest quality that exists, and we will take the accuracy test any time, any day with anybody."
But the Internet -- and Google's search engines -- are filled with cheap content and questionable reviews, leading to the question of whether there is room for Zagat's model of expensive, highly-edited and curated content. Asked about the profitability of Zagat's hands-on method, Google's Mayer was quick to highlight the review company's impressive business model: "Zagat is an incredibly efficient system and business," she asserted. "[It] has been profitable every year since it was founded."
In fact, Mayer suggested that Google may extend the Zagat model into other content areas: "Our goal at Google is always to be comprehensive," she noted. They have a very efficient operation here, already operating on an incredible scale with 100 cities. Our goal will be to add more cities and more categories." Ultimately, she asserted, Zagat will be "one of the cornerstones of our local offering and our reviews platform."
The Same, But Bigger
Everyone involved in the acquisition was quick to point out that -- for the time being, at least -- things won't change very much at Zagat. The company's pay wall -- which allows free access to its raw crowd-sourced reviews, but requires that customers pay to read the edited versions -- will remain up for the time being.
As for Zagat's famous guides, Nina Zagat notes: "We're still publishing them the same as ever." In recent years, Zagat has worked to blur the line between its books and its website. As Tim notes, "We produce digital content. We can turn it into books; we can put it online and create mobile products...For example, we recently published a downtown New York City guide that combined reviews on shopping, food and nightlife in one book...We can do this online, in book form, or as a mobile app."
In fact, both Zagat and Google are both closely focused on the mobile market. Tim Zagat has previously noted that the company's mobile app, which is available in both iPhone and Android versions, is the highest-grossing travel app on the market. Meanwhile, Google's Mayer pointed out that "Google maps for mobile is arguably the most successful app for mobiel phones worldwide," noting that it has "more than 200 million monthly active users." One likely outcome of the Zagat acquisition will be a close merging of Google's mobile maps platform with Zagat's reviews -- a move that would threaten UrbanSpoon, CitySearch and other review apps.
For Zagat fans, the acquisition promises a broader range of content, while Google users may soon have expanded access to reliable, edited reviews covering a broad variety of consumer services. In fact, this purchase may prove to be a delicious recipe for online review success ... assuming, of course, that your name isn't Yelp!
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.