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Google Buys Restaurant Review Service Zagat

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Google Buys Restaurant Review Service Zagat

Business

Google Buys Restaurant Review Service Zagat

Google Buys Restaurant Review Service Zagat

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Google's deal with Zagat is part of the Internet giant's strategy to offer better local services. And it has some wondering if the company will launch an online and mobile reservation service similar to Open Table.

STEVE INSKEEP, host:

One company known for patent battles is Google. Of course, it is better known for ever-widening information services, trying to make money off of them. The company just bought the venerable restaurant review guide Zagat.

As NPR's Ben Bergman reports, the purchase is Google's biggest attempt yet at gaining a foothold on local searches.

BEN BERGMAN: Long before people decided where to eat based on how a restaurant fared on Yelp, there was Zagat. And before any of us had smartphones, Zagat was mobile. Its little maroon booklets could easily slide into a pocket. But like so many companies, Zagat was never able to translate its print success to digital. Enter Google.

Forester analyst Sucharita Mulpuru says while the deal may not give Google any immediate revenue, it provides the all-important stickiness, making users spend more time on Google.

Ms. SUCHARITA MULPURU (Forrester Research): This is definitely an opportunity for them to have a little bit more of a play on mobile devices, to have relevant information that they can populate on Google Maps or on local searches.

BERGMAN: This was Google's third major attempt at better tapping into the lucrative local advertising market. Google made unsuccessful plays for both Groupon and Yelp in recent years. Google won't say what it paid for the restaurant reviewer, but Mulpuru says it likely got a good deal on Zagat.

Ms. MULPURU: They're more of a traditional media company and because of that they probably actually had a little bit of a depression on their price versus some of the inflation that exists with a lot of these tech players like Yelp.

BERGAMN: The biggest loser in the sale seems to be the restaurant reservation site OpenTable. Its shares tumbled, closing down more than eight percent after the news.

Ben Bergman, NPR News.

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