No doubt that Google decision to acquire Zagat gives its local business strategy a nice boost.
But it’s not without some tension. Google, which likes to think of itself as the great organizer of the world’s information, is increasingly owning important chunks of it. And that raises questions about whether the company will give the information it owns preferential treatment over information owned by others.
“This is exactly why Google is on the hot seat for antitrust,” said Consumer Watchdog President Jamie Court, an activist and frequent thorn in Google side. “This is when the search engine becomes the find engine.”
It’s not an academic point. Fears about Google playing favorites with its properties have emerged before, and even tripped the company up. Last year, competitors in the air travel business raised those concerns when Google announced plans to buy ITA Software, which provides travel information to various Web sites. Companies such as Expedia, Kayak and Hotwire worried that Google could have created rival Web sites and not given them information necessary to compete. That led federal regulators to step in and require Google to continue licensing ITA’s travel technology to competitors for five years on “reasonable and nondiscriminatory” terms before approving the $700 million deal.
Google declined to discuss the potential conflict for this article, instead pointing to a blog post announcing the deal by Marissa Mayer, its vice president of local, maps, and location services. In that post, Mayer writes that “Zagat will be a cornerstone of our local offering.”
So where does that leave rival sites that also review restaurants such as Yelp, with whom Google has tangled before? It’s unclear. Google has consistently said it won’t tweak algorithms to favor its businesses. And right now, if you search, say, “Thai food Chicago,” Yelp’s data is the first result that pops up on Google.
If Zagat displaces Yelp on that search and other similar ones in a few months time, it will undoubtedly raise questions.
That’s the peril of owning information when you dominate the business of organizing it as well.