Google's Zagat buy could give search critics more ammo
Google's acquisition of Zagat, which was announced on the Google blog on Thursday, is a relatively small one for the search-engine giant: less than $66 million, according to some estimates. But the ripples created by the deal …
Context & Ripple Effects
Google's pursuit of Groupon had already raised concerns about how far the search company should extend into adjacent consumer services. Reporting put the Zagat transaction at less than $66 million, making its strategic significance larger than its price tag.
First-order effects
- Google gains control of Zagat, while critics of the search company gain a concrete acquisition to cite in arguments over its expanding reach.
Second-order effects
- The deal reinforces concerns attached to Google's Groupon bid, focusing attention on an acquisition strategy that reaches beyond the core search product.
Third-order effects
- If Google continues adding adjacent consumer services, scrutiny is likely to assess the cumulative reach of its acquisition portfolio alongside its search-market position.
The trend: Google's Zagat purchase is part of a broader shift in which search platforms extend their reach by acquiring services and data close to consumer decisions.