Google bought Zagat Survey this week for an unknown amount between $50 million and $200 million. Zagat specializes in ratings for restaurants, hotels and travel destinations informed by the input of some 350,000 contributors.
Google offered Zagat competitor Yelp $500 million in December 2009, but the offer was rejected.
Silicon Valley companies often make acquisitions to gain access to talent, intellectual property or markets. But Google's Zagat buy is mostly about data and a winning methodology for maintaining it.
Zagat ratings are on a 30-point scale, with 30 being the highest score for each attribute. In the case of restaurants, attributes are "Food," "Decor" and "Service." The database behind all this has a number between zero and 30 associated with each location's attribute, as well as pricing and other information. It also contains a field where short blurby "reviews" are entered.
Data for Zagat's is gathered using a reliable methodology that's much harder to "game" than Google's "Places" service.
As an embarrassing example of how unreliable Places is, the New York Times this week published an expose about the apparently widespread problem of sabotage on the service. Unscrupulous business owners are apparently using the tools on Places to falsely label their competitors as "permanently closed."
Places data also shows up on Google Maps, associated with each business's location.
"Closed" or "open" status is either true or false. As such, it's a relatively easy thing to check. The hidden problem with sites like Places, as well as Yelp, is the unmeasurable "reviews" portion of each service. It's very easy for a business owner to write fake positive reviews for his own business, and fake bad reviews for the competition.
The Times also published another expose recently about the growing industry of fake restaurant and hotel reviews for hire.
Zagat's reviews are more reliable in part because participation is more time consuming and engaging, and also because Zagat uses editors to filter comments. Zagat also polices results, and threatens on its website to remove any establishment caught violating its Content Creation Policy.
There's no question that Zagat data will improve the quality of recommendations on Places and Maps.
Why Google really bought Zagat
Google started out as a search company, and continues to rely on search for the core of its business. But this success requires constant innovation and improvement in the search experience.
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