Thursday, September 08, 2011

Google Buys Zagat....So what does that mean for Yelp and Foursquare??

It's a little late in the day to report this--as most of you probably know by now--but Google has purchased Zagat, known for its almost never-wrong restaurant ratings. Here's the announcement from Tim and Nina Zagat with a great nod to the consumer who has helped to make their guide great:
It is a testament to the knowledgeable consumers who contribute their opinions that Zagat Survey has become an internationally respected symbol of quality. Their experiences, distilled into numerical ratings and concise, witty, quote-filled reviews, will continue to provide accurate guidance for a wide range of leisure activities.

Much is being said all over the Internet about whether or not Google will keep Zagat's pay wall, whether the Zagat site will become a platform, etc. And that's great. But the real story is what's going to happen to Yelp, a direct competitor with Zagat. There are a couple of other things to note about the Zagat purchase (as Larry Dignan points out:

  • the purchase puts Google squarely in the content business (user-generated content, no less)

  • Google bolsters its ability to build out its local offerings

  • Will it cause more more search troubles for Yelp??

Buying Zagat also reaches into Google's mobile offerings: think of how Zagat info might be incorporated into Google Maps on the Android phone! It then becomes a big competitor to apps like Citysearch.

Because of this potential, there's been some talk about how the sale might impact Foursquare. Given the Pew Internet and American Life's latest survey on mobile and social location based services and their use, the perceived threat to Foursquare is small in comparison to the threat to Yelp. The bigger challenge to Foursquare is convincing the public that giving away location specific info is a good thing. Foursquare also might want to consider how to add some content value to its service. Not that this might greatly change people's reticence to share their locations.

Google+ might also be impacted by the purchase. Right now, scuttlebutt has it that many find the learning curve of G+ to be a hindrance to its regular use. But, if particular groups find that their user-generated content can quickly be incorporated into a service like Zagat, which has a high level of credibility with the public, then there may be an uptick in G+ use.

So, right now, watch out for what happens with Yelp now that Google has Zagat, as well as how Google perhaps re-engineers Zagat's paywall, other services, as well as how and where it accumulates new user-generated content. Oh, and then there's search: watch where Zagat info appears now in search vs. where Yelp info appears.

As for Foursquare: the Pew report says a lot more than the Google/Zagat merger.