Google Gobbles Up Zagat

In the spirit of Arianna Huffington's heist of AOL money, Yale Law School grads Tim and Nina Zagat (photo) gladly sold their popular consumer rating franchise today to Google. Both parties were mum on the transaction price. However, the Zagats tried to deal their "baby," as they put it in their statement on the acquisition, a couple of years ago for $200 million. There were no takers at that price; one wonders what Google ponied up to turn Zagat employees into Googlers.

There are two camps about the Zagat guides. One sings Zagat's praises and characterizes its franchise as the greatest enterprise since, well, Google. (The San Jose Mercury News' story on the purchase, especially the analysts' quoted in it, is a case in point.) Skeptics don't buy Zagat's 30-point rating scheme and find its aggregation of amateur opinion offers little value to a sophisticated diner. (Felix Salmon of Reuters articulates the anti-Zagat position with conviction. Interestingly, Salmon has a background as a good financial reporter, and is not beholden to the food mafias.)

One can understand Google's many motivations for their purchase of Zagat and its burgundy books. (Google VP Marissa Mayer's blog post on the acquisition is linked here.) The rating system fits neatly into Google's search engine ranking style, in which popularity is king. The Zagat database gives Google a fig leaf to avoid rumored litigation from web-based ventures which allege the search engine monopoly consign their information to cyber Siberia. Google also obtains the Zagat patents, something that again shield the Mountain View, California firm from unwanted courtroom visits. Google can also muscle into the online restaurant reservation business in major American markets. That thought caused Open Table, whose business is entirely point-and-click dining reservations, to experience a significant share price decline in today's stock market.

The Zagat sale suggests something else: the high water mark for popular dining has just passed. High unemployment, grim debt levels, reduced business expense account spending, increased costs for meat, fish, and other food items, elusive credit, fewer investors, and uncertain real estate values make the restaurant game an unattractive one. Admittedly, restaurant-rich zones such as Manhattan south of 96th Street, Miami's South Beach, hipster San Francisco, and some other islands of prosperity, enjoy full tables and active bar scenes. Somehow, this feels like the last hurrah for them.

In the meantime, I'm glad Google has absorbed the Zagat franchise. The Z's rating system struck me as bogus. The lack of a distinctive voice implied a homogenization of burgundy book opinion. The Zagats' craving of "pithy" comments demonstrated a taste for tart New York-style wisecracks that were never a satisfying substitute for smart, thoughtful observation. The Zagats were also very willing to use their clout to "encourage" restaurants to participate in pet projects, such as the cheap dinner experience which was touted to boost dining interest.

What's needed are strong, individual voices. It's tough. Cookbook cabals, grating TV chefs, and empire building restaurateurs work against their development. One thing is certain: those voices will come from somewhere other than Google or the Yale Law School.