Google Pays Chump Change for Zagat
Even if you thought Google buying Zagat was a joke, you can't deny that for $125 million, the figure The Wall Street Journal is reporting the search giant paid for the restaurant review company, that Google got a deal. Maybe it makes sense for Page & Co. to add the guide booklets to their portfolio, as our own Adam Clark Estes argued. Or maybe it doesn't. Either way, it's not a huge investment. To put things in perspective: Google offered half a billion dollars to Yelp before we even knew how big this whole restaurant review site thing would get. And it paid 12.5 billion for its recent Motorola acquisition. Oh yeah, and they had over $9 billion in revenues last quarter alone.
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The number falls within estimates for what was expected--between $60 million and $200 million. Zagat had put itself on the market for $200 million back in 2008, perhaps signaling Google talked them down. But arguably the company, with more free online competitors, has gotten less, not more, valuable in the last decade. Even if Google overpaid based on the company's value, having the editorially driven company in its back pocket for $125 mil won't hurt. Sounds like a deal to us.
