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11.9.11

Google Purchased Zagat For $125 Million


News broke today that Google had purchased restaurant reviews firm Zagat. Sort of a weird acquisition, as my colleague Angelo told you about, it looks like Google is planning to incorporate Zagat’s reviews into some sort of social networking scheme (we’re okay with that, as long as Dairy Queen’s milkshakes are still rated best in the country). The purchase price of Zagat has been speculated upon, and now the Wall Street Journal has confirmed the final price tag to Google.

Although our man Angelo had speculated that the purchase price was below $66 million, the ‘Journal’s inside sources are reporting that Google picked up Zagat for the price of $125 million. That’s still substantially lower than the $200 million that Zagat’s owners were looking to get purchased for. The price is somewhat disappointing, considering that Zagat was valued at $125 million in a stock offering way back in the year 2000. 11 years, and no change in the value. But that’s the world we live in.

It basically looks like the US Federal Government has punted the ball and opted not to look too closely into the deal.  You’ll remember that the Google-AdMob deal was very strictly scrutinized by the US government, as well as the AT&T-T-Mobile acquisition, which has been formally blocked by the US Department of Justice. It seems like the Federal Trade Commission doesn’t seem to be interested in Zagat.

You’re probably familiar with Zagat, they publish the maroon-colored travel guides that rate resturants and hotels. May be a generational thing, but in the era of WikiTravel and Yelp, it’s hard to imagine buying one of those books. Despite that, Zagat bosses Tim and Nina Zagat say that they plan to continue publishing the guide books under Google’s ownership. Zagat’s famous 30-point grading scale will also live on under the watch of Mountain View. I fully expect the latter to be more likely than the former, at least in the long-term.

The Zagat acquisition is apart of a bigger plot by Google to dominate the local and hyperlocal internet scene. Google has recently launched Google Offers – a Groupon competitor, and whatever form Zagat takes, plus Google Offers, plus Google+ should all form one hyper local social recommendation networking daily deals site. Hope that’s not enough buzz words for you.

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