Zagat vs. Yelp: A Restaurant Review 2.0 Showdown?

20080908-yelp-vs-zagat.jpg Randall Stross compared Yelp and Zagat in the New York Times on Sunday. While he correctly noted that Yelp now covers more restaurants than Zagat, and uses this as a launching pad to compare and contrast the two companies, he leaves out the most relevant points. Most notably, he completely whiffs on recent business goings-on in the world of user-generated restaurant reviews.

My first question is what do serious eaters think about both Zagat and Yelp?

And while you ponder that, here's what Stross should have pointed out in his comparison.

Stross interviews Zagat co-founder Nina Zagat, who correctly points out that Zagat was the pioneer of user-generated restaurant reviews. The company is about to celebrate its thirtieth birthday. But he fails to point out that Zagat's long headstart in this realm was wasted because:

a) Zagat has adapted poorly and slowly to the web 2.0 world. Though its paywall has generated revenue, it has also severely limited the Zagat traffic numbers. Zagat's failure to adapt to the web world fast enough has granted Yelp (and Yelpers) a huge advantage.

b) Because Zagat was started as a print vehicle by two lawyers 30 years ago, the customer base, by definition, is going to be significantly older and less web-oriented-and-savvy than Yelp, which was built from the get-go in 2005 as a younger-skewing web community. Again, this gave Yelp a tremendous leg up in terms of building traffic.

c) Perhaps most egregiously, Stroess fails to mention that in the last year Zagat tried and failed to find a buyer at what was reported to be a wildly inflated asking price. Zagat has now, apparently, taken itself off the market. Many observers think that Yelp's emergence is one of the principal reasons Zagat couldn't fetch anything close to the asking price. The real question here—do we live in a Yelpized world where Zagat's time has passed? The Zagat guides will continue to stay relevant and useful to older restaurant-goers, particularly in New York, where they have something of a print stranglehold on the market. But going forward, it's hard to see how Zagat will compete effectively with the Yelps of the world.


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