Buyouts not always successful

Google has a lot to be proud of.

Having just celebrated its 15th birthday along with the release of its newest search algorithm, Hummingbird, Google continuously tops the rankings for lists such as most innovative, most desired workplace and more. As one of the biggest tech companies in Silicon Valley, Google has accumulated the time and money to devote to other projects and acquisitions including Waze, Android, YouTube and 126 others.

Though Google isn’t perfect — especially regarding the negative press it has received for its privacy concerns — let’s be honest. If you’re running a startup right now, I’m sure you wouldn’t mind if it turned into the next Google.

Despite the jackpots it has hit with its acquisitions, however, not all of them have turned out so well. In fact, in an interview with TechCrunch in 2012, David Lawee, Google’s vice president of corporate development, revealed that one-third of Google’s acquisitions fail.

Then again, what exactly defines failure?

Because there’s one acquisition that Google made back in 2011 for a modest $125 million that still makes me scratch my head.

That acquisition? Zagat.

Looking back, perhaps it wasn’t such a strange move. In fact, in 2009, Google attempted to woo Yelp over to its side with $500 million, but failed to do so. At the time, the dawn of the review era was becoming more widespread, particularly with sites such as Foursquare and aforementioned Yelp. People are more likely to trust reviews now since advertisements have turned us into crabby and skeptical consumers.

Menus and recommendations for restaurants are also just two of the many, many search terms that people otherwise Google. But think about all of the people in the world looking up menus and restaurants. It’s certainly a lot of web traffic, and you can’t blame Google for wanting to get in on it.

Even so, the acquisition seemed rushed, as if Google bought Zagat without fully knowing what to do with the company afterward. In a Business Insider article published in late June, the internal issues at Zagat, due to the change in leadership, were hashed out. Because Google, specifically then-VP Marissa Mayer, wanted to push Zagat in an editorial direction, many employees were under contract and were not promised permanent jobs which, predictably, made people very angry.

The editorial push hasn’t been so successful anyway.

Zagat has always been known as the Consumer Reports for restaurants, particularly for its eponymous reviews. But once Zagat started to push content, site visitors became disinterested — or so it’s implied. In July, Google relaunched its website and mobile apps so that no payments or registration are required — an uncharacteristic move toward anonymity on Google’s part.

Despite this failure, Google is still trying to find a home for Zagat.

Google+ has shown some potential for Zagat. With more than 3 million people following Zagat, there’s room for interactivity through means such as Google Hangouts with food experts and chefs.

To bolster the review aspect of Google, the company launched Google City Experts in August, which selects a number of Google+ users and guarantees them Google swag and entrance into special events. In other words, an eerily similar version of Yelp’s Elite Squad.

And when looking for a restaurant’s website, don’t be surprised to see that one of the first results will most likely be paired with a rating based on Google’s reviews.

Even Sergey Brin’s young brother, Sam Brin, is trying his luck in the restaurant industry with his startup, Butter Systems, one of many digital menu ordering platforms out there.

Zagat isn’t a lost cause, but there still doesn’t seem to be much of a direction for the reviews site. Yelp and Foursquare dominate the restaurant review space, and though the thought of being a part of Google as a City Expert sounds cool, it isn’t very easy. First, you have to use Google+.

That eliminates a lot of us.

Second, you have to write at least five reviews a month. Sounds pretty doable, but if you forget to do a fifth review in any given month, you lose your fancy title.

I understand that review quotas guarantee consistency. Yelp, for example, is a little more whimsical when it comes to doling out its Elite statuses. I’m not saying Google should color outside the lines, per se. With its doodles, boundaries are being pushed, but slowly.

There needs to be a plan for Zagat, and I think Google+ might just be one way to make the most of the acquisition. If Zagat started offering private cooking classes or personal meet-and-greets through Hangouts, then more people, particularly those with a love for food, might start flocking over to both Google+ and Zagat. It might not hurt to try and revamp the Zagat review system to make it even more reliable and trustworthy than the systems that its competitors use.

Revenue aside — since 97 percent of Google’s profits come from advertising — if Zagat doesn’t have a strong enough user base three to five years from now, I think it would be in Google’s best interest to abandon the acquisition altogether, especially if it starts to cost more to maintain.

But it could only be a matter of time. As a self-proclaimed Yelper, a part of me wants to try out Google City Experts, since it could turn out to be a completely different experience. And if Zagat can get its creative juices flowing, perhaps we’ll see a new take on the intersection of food and tech soon.


Sara Clayton is junior majoring in public relations. Her column “Tech Today” runs Tuesdays.

Follow Sara on Twitter @saraclay15