to pay or not to pay: Zagat's dilemmafounded by tim and nina zagat, the Zagat survey has collected published ratings of restaurants by diners since 1979. Zagat publishes surveys for restaurants, hotels, and nightlife in 70 major cities. Zagat has come a long way from its roots in the early 1980s, when the food loving zagats started compiling lists of their favorite restaurants for personal use and to share with their closest friends. But with the rise of the Internet e-commerce, and mobile technology, Zagat has strug gled to find a business model that stayed true to the company's origins To generate their first survey, the zagats polled 200 people, and increased that number over time Executives, tourists, and New York foodies alike found the list to be indispensable. Spurred by this success, the Zagats decided to publish their survey themselves. The few booksellers that took a risk in stocking the book were rewarded with sales so robust that the Zagat surveys became best sellers The pair also published similar lists for other major cities, including Chicago, San Francisco and Washington, D.C. In addition to print books, zagat opened a unit that creates custom guides for corporate clients, like the ones at Citibank. For a long time, this business model was sufficient to ensure that Zagat survey was successful and profitable When the dotcom bubble came along, venture capitalists were attracted to Zagat for its brand rec ognition-the Zagat name is instantly recognizable to t was one of the first companies to popular ize content, collecting restaurant reviews from its readers, aggregating those reviews and computing ratings. In addition to rating scores, the survey also includes a short descriptive paragraph that incorporates selected quotations from several reviewers' comments about each restaurant or service. Venture capitalists saw that zagat had a golden opportunity to migrate its content from to Web, and mobil the many decisions the Zagats faced in bringing their content to the Web, perhaps the most important was how much to for various types of content. They ultimately decided to place all of their content behind a pay wall, relying on the Zagat brand to entice customers to purchase full online access. One of the most prominent members of the Zagat investment group was Nathan Myhrvold, formerly the chief technology officer at Microsoft. Myhrvold supported the Zagats' decision to use a pay wall for their content and maintained that putting all of their content online for free would have undermined their book sales. Although Myhrvold and the Zagats themselves favored the pay wall other zagat investors argued that placing content online for free allowed compa nies like Yelp to get its results on the first page of Google search results, which is critical for maintain- ing the strength of a brand in today's advertising environment. By not taking this approach, zagat left itself open to be surpassed by Yelp, Groupon, Google Places, and other similar services offering free con- tent supported by advertising from local businesses, sure enough, these companies soon began attracting numbers of online visitors that dwarfed zagat's 2008, the Zagats tried to sell their company They failed to do so, partially due to Yelp's growin popularity. Prospective buyers were more intrigued by Yelps much larger online audience and growth potential. The zagats failure to sell the company in 2008 highlighted their failure to effectively go dig l. Food blogs and similar sites abound on the Web nowadays, but zagat was in a unique position to get there first and establish itself as a market leader and t failed to so behind l, Zagat continued to battle fo com. From January to April 2012, Zagat.com had while Yelp had 31 million, The only 310,000 visitors,
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