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What the Yelp? What the Google / Zagat Deal Means for Yelp

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On September 8, 2011, Google showed us that they will continue to try to conquer the world by the second! Google recently bought Zagat, a company that provides reviews for top restaurants around the world, and it seems that Google did so because their prior business review strategy was not working too well.   Google had some conflicting issues with Yelp, who claimed that Google was using their reviews on Google Places, but not linking back to Yelp. Understandable conflict.  In 2009, Google attempted to acquire Yelp for an estimated $500 million. We are not sure why Yelp refused to sell. Maybe Yelp was bitter or maybe they wanted to keep the identity they spent years establishing. After all, Yelp has a following all of their own and maybe they did not want to lose their name to Google.  Details still aren’t available, even two years later.

What we do know is that Yelp has some troubling competition ahead of them. Google is the most used search engine and they continue to buy companies to better serve their searcher community. Everywhere I go, and usually when I am writing something or another about Google, I hear the background noise around me. It is usually people saying “…so I Googled it” or “I used Google maps to find the reception for the wedding.” Everywhere I go, I hear Google. I mean come on, people even use Google as a verb. You don’t hear people saying, “…so I Yelped it.” Google is already established as one of the greatest search engines, and now that they have added Zagat…oh, Yelp, you may be in trouble. Although this is bad news for Yelp, it is fantastic news for anyone who was advertising with Zagat and even better for anyone who has a wonderful review through Zagat. That is of course if all goes well with this new partnership.

People love Google, and Zagat loves grading restaurants, and if a restaurant is good enough, they get a maroon sticker that says “Zagat Rated.” Now those “Zagat Rated” companies will have their prestigious status all over the Google search engine instead of just in their store front or just in the Zagat magazine.  Zagat should help Google’s advertising platform because now the businesses that were advertising and supported through Zagat will be immediately associated with Google.

This acquisition brings much-needed attention to Google Places, attracting consumers and sparking interest in companies that may have never given their Google Places profile a second thought. That means we should expect to see far more interest from local businesses who are now motivated to advertise their products and services on Google. Those businesses who have already advertised on Zagat should see an increase in revenue over time because of Google. Why should those businesses see an increase in revenue? Glad you asked! To break it down:

  • Advertisers on Zagat move to Google
  • Google gets the most amount of searchers
  • Zagat advertisers get more leads through Google

But once again, this corollary is true only if all goes well with Google’s new acquisition.  Overall, Google owning Zagat may be troubling for some other review sites, but it could be a tremendous improvement for Google Places, for local businesses, and for those restaurants who are lucky enough to be “Zagat Rated.”