5) Zagat’s acquisition by Google make it more Competitive

Google’s most notable recent acquisitions and initiatives are Google Play which are a recently launched entertainment application for music, television, and movies, Google Fiber where a fiber optic Internet network capable of reaching connection speeds of up to 1,000 Mbps and Google Drive is a cloud-storage and group collaboration workspace integrated with Gmail and Google Docs. Google’s acquisition with Motorola Mobility be the centerpiece of the company’s push into mobile and communications hardware. Motorola Mobility will be run as a separate company whose wares are intended to complement the Google’s Android platform. Google had been in talks to acquire Yelp in late 2009, but those discussions fell apart and Yelp walked away from some $500 million. Since then, the relationship between Google and Yelp has been tenuous, as Google borrowed liberally from Yelp’s database of reviews to flesh out its Google Places pages. However On September 2011, Google Inc paid $151 million in cash for the Zagat Survey. Google bought the Zagat Survey to counter the popularity of Yelp's business rating service. Google’s annual report shows that it already acquisitions of 57 companies.
Google's vice president of Local, Maps and Location Services, Marissa Mayer stated that Zagat will be a cornerstone of Google local offering and delighting people with their impressive array of reviews, ratings and insights, while enabling people everywhere to find extraordinary experiences around the corner and around the world. Moreover Marissa Mayer informed that by Zagat Google gain a world-class team that has more experience in consumer based-surveys, recommendations and reviews than anyone else in the industry.

Google has acquired Zagat because of big local push. Google has been building out its local offering called Google Places where includes aggregated photos, reviews and map information about local businesses and which shows up in search results.
Zagat is the first examples of user-generated content, where Google is which has made local services one of its highest priorities. Further, this combination will make Zagat more competitive. Zagat’s reviews would supplement Google’s Places reviews.
By this acquisition Google planned to expand Zagat’s team, which now includes sales staff, fact-checkers, hundreds of contractors who conduct the surveys and, most important, the hundreds of thousands of reviewers in more than 100 cities.
The quality of Zagat’s reviews is much higher than the reviews published by their competitors. Zagat’s review process is very different from the reviews published elsewhere. Zagat stresses that the reviews come from verified users, and comments from Zagat’s user-base are reviewed and curated by staff members. The process ensures higher-quality and more trustworthy reviews.
The combination of Google and Zagat will be the killer to Yelp, which is one of the local search. The addition of Zagat to Google services such as Maps, Plus and Now hasn't quite lived up to any expectations that it would really provide heated competition with Yelp or even Foursquare.

Zagat moves farther from just user reviews but rather toward curated content and expert local editors. With a new desktop portal as well as iPhone and Android versions, Hall also emphasized that the new Zagat is also making its ratings and reviews available for free without registration for the first time ever. Zagat now covers restaurants and nightlife in nine cities. The team is promising to expand coverage to at least 50 U.S. and international destinations in the coming months. Google will build out its local coverage and have reviews in more than 100 cities. Google is showing that it may actually have to own some content instead of merely aggregating it.

However, the merger of Zagat resources, expertise and platforms with Google will give the opportunity to greatly expanding the Zagat. Zagat management have spent enough time with Google senior management to know that they fully share Zagat’s belief in user-generated content, and commitment to accuracy and fairness in providing consumers with the information necessary to make smart decisions about where to eat, travel and shop.
By this acquisition, deal shows the importance of Places in Google’s local strategy for advertising by gathering more local businesses, for social by getting more local reviews which could be possibly be piped to Google+, and for search by making Places more attractive search results. To do all those things Places needs a community and user-generated content. Zagat has both.
Google’s financial position is as strong as its product offerings. The company’s annual revenue has been growing by 20% or more for years and many analysts predict similarly strong growth in coming years. Annual earnings in 2011 grew by about 13% over the previous fiscal year and 2012 EPS growth is expected to top 40% by some estimates. The company’s net margin in 2011 was a solid 27%. Google’s 5-year expected PEG is a mere 1.2 and its P/E is 20 strikingly average for a swiftly expanding technology company. By this Zagat can compete in the form of financial. Zagat get enough finance to make it expand and competitive.

Moreover, the acquisition will affect the search marketing. Local restaurants familiar with the Zagat name should be thrilled. People are familiar with Zagat, and restaurants should encourage their patrons to review their experience on Zagat, knowing that this content will likely be shared on their Google Place page. Zagat’s review content will likely be injected into Google’s search properties including Places and even potentially the recently beta-launched Hotel Finder. This content will vastly improve the credibility of many Place pages that were left without reviews when Google pulled the plug on reviews from third-party sites. Google will also be able to take advantage of Zagat’s foothold in mobile. The company’s review platform is available an app for most web-enabled handheld devices. Mobile is easily the fastest growing segment on the web, and now Google has even more content to people performing local and mobile searches. Zagat’s categorization of restaurants really lends itself well to Google’s location based mobile search. Zagat also has a deals platform. The company currently offers 30-percent off to hundreds of restaurants in several major markets across the country. Google has just started exploring the deals frontier, which gives Google more options.