Shares of OPEN plunged today on news that GOOG bought Zagat. Okay, let’s think about this for a second. Zagat makes their money through selling high brow reviews of restaurants. Often times, they annihilate eateries with scathing reviews. Now they want to get into the reservation business!? Pardon me, but they have a serious conflict of interest and cannot be taken as a serious competitor to OPEN, with GOOG or not. How the fuck are they going to offer reservations to shitholes they pan? They would take payment from restaurants, and in return, their “analysts” would give rave reviews for client accounts just like S&P did during the housing bubble. There is no way Zagat moves in on Opentable’s territory. They are embedded as an industry leader and no one gives a fuck about Urbanspoon either.
Back to Zagat. As far as I am concerned, they’ve been irrelevant for three years now, ever since Yelp entered the market. Why would I want to read the review of just one asshole from Zagat, when I could read 100’s from regular people, without agendas, on Yelp for free?
Google is the new Microsoft, making all sorts of fucked up decisions. They are Johnny come lately to nearly every new business initiative and should stick to what they do best, search. Android is their X-Box and they should get ahead of the curve by issuing a large divided. Within two years, growth at GOOG will stagger and the share price will lag.
Whether OPEN is a buy here is anyone’s guess. It is certainly intriguing at these levels. However, I’d like to see some share price stability first.If you enjoy the content at iBankCoin, please follow us on Twitter