Google purchases Zagat to expand local content

Closing the door on OpenTable?

Google has agreed to purchase restaurant review company Zagat in an effort to expand its local content for users. In a blog posting, Google said Zagat would be “a cornerstone of our local offering – delighting people with their impressive array of reviews, ratings and insights.”

Zagat founders Tim and Nina Zagat said, “We are thrilled to see our baby placed in such good hands and to start today as official ‘Googlers.’” Zagat was founded in 1979 and hired Goldman Sachs (GS) to help the company find a buyer in 2008. News of the purchase sent shares of OpenTable, and online restaurant reservation and review site tumbling as the balance of power has dramatically shifted in the online restaurant review world.

While some believe this spells the beginning of the end for OpenTable, others suggest that it could recover and possibly be the acquisition target for search companies looking to strengthen their position versus Google.

Google (GOOG : NASDAQ : US$534.96), Net Change: 0.93, % Change: 0.17%, Volume: 2,345,479
OpenTable (OPEN : NASDAQ : US$57.50), Net Change: -5.23, % Change: -8.34%, Volume: 8,297,333

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