Zagat Survey up for sale

Post Image During my trip to New York in December, I became quite familiar with Zagat. As a foodie, Sharon assured me that Zagat was the final word on restaurants in NYC. And walking around certainly convinced me – tons of restaurants proudly display their Zagat rating or review in the window. If I had to guess, I’d say Zagat makes quite a bit of money, so I was surprised to see this in today’s Times:

Zagat Survey, the guide empire that started as a hobby for Tim and Nina Zagat in 1979 as a two-page typed list of New York restaurants compiled from reviews from friends, has been put up for sale, according to people briefed on the decision.

It is unclear how large a price Zagat will attract. While the company is a worldwide brand, its actual business is much smaller. People briefed on the company’s finances suggest the company could be valued at more than $200 million, which would still be a drop in the bucket for an Internet company or a wealthy executive.

The article hints that the reason for the sale is getting to the next level. Despite tons of success over the last three decades, more capital is necessary to move beyond organic growth. Potential suitors (as mentioned in the article) include just about every company with some cash, including IAC/InterActiveCorp, News Corporation, American Express, AT&T, and others. Heck, why not Facebook? The two companies have a partnership apparently.

I had no idea that Zagat had so many tech investors. The extremely well known Kleiner, Perkins, Caufield & Byers is one, as are former Microsoft CTO Nathan Myhrvold and Nicholas Negroponte, director of the media laboratory at MIT.

It depends who the buyer is, but I suspect the Zagat brand will lose some clout after a sale goes through.


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