Google Presses Yelp With Google+ Local With Zagat Ratings

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GOOG
Alphabet

In 2011, Google (NASDAQ:GOOG) acquired Zagat in a bid to compete with Yelp (NYSE:YELP) and OpenTable (NASDAQ:OPEN) in the restaurant review space. Last week, the company announced the launch of Google+ Local, which is integrated with listing information from Zagat. Google+ Local offers a repository of information on restaurants with features such as Zagat scores and recommendations from your friends on the Google+ network. [1]

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The service will be integrated into Search, Maps, Mobile and will be available as a separate tab in Google+. With this launch, Google now competes directly with Yelp, who is the leader in the space. In addition to providing reviews and ratings, Google+ Local has a social component as well and leverages your entire friends and family network to provide the most relevant recommendations and opinions.

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This new service can be hugely profitable for Google if it can attract a substantial user base. Search advertising accounts for almost 70% of Google’s overall value with mobile search ads accounting for a significant portion of that 70%. Over time, Local search ads could become a larger portion of the mix depending on the success of Google+ Local.

We currently have a $680 Trefis price estimate for Google, which is nearly 20% above its market price.

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Notes:
  1. Local—now with a dash of Zagat and a sprinkle of Google+, Google Blog []