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What does Google get from buying Zagat?

An ad for Google and Zagat

KAI RYSSDAL: Just 'cause it's a multi-gazillion dollar search engine company doesn't mean Google can ignore trends. One key online trend nowadays is local. Everybody's doing it.

Today, Google took another big step in that direction. It's bought the restaurant review company Zagat. Yeah, I used to call it ZAG-ut, too. The deal lands Google smack in the middle of the local restaurant review scene occupied by the likes of Yelp and OpenTable.

Sally Herships reports on the coming food fight.


SALLY HERSHIPS: Google already lists restaurant reviews. And the company makes millions from the ads that alongside those search results. But Zagat goes beyond search.

Colin Sebastian is an Internet analyst at RW Baird. I caught up with him with as he was heading into a meeting with Google.

COLIN SEBASTIAN: I don't think this was necessary for them to continue growing their core business, but I do think it helps them gain more of a foothold in the local market.

And more marketing dollars from local businesses. Dollars that now go to sites like Open Table, Yelp and Yahoo. Sebastian says buying Zagat also brings more customer reviews to Google.

SEBASTIAN: And that makes Google search results more relevant and that makes it more useful for those local searches.

John Greening teaches marketing at Northwestern. He says Google wants to use local content to stand out.

JOHN GREENING: And then that audience stays loyal to Google.

Those who stay loyal to Zagat still need to pay -- $24.95 a year. Google said it has no plans to change Zagat's pricing.

In New York, I'm Sally Herships for Marketplace.

About the author

Sally Herships is a regular contributor to Marketplace.

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