Zagat Survey Has Record Year
Jim Milliot -- 1/29/01
By any measure, 2000 was a remarkable year for Zagat Survey LLC. Bolstered by $31 million in funding from a group of venture capitalists, the publisher of the popular restaurant review and guide books recorded a 70% increase in book sales, added 90 new employees to bring its full-time staff to 130, hired its first CEO, Amy McIntosh, who joined the company on November 1 and accelerated its efforts to build a technology infrastructure that will permit Zagat to augment sales of its print products with revenues from electronic media.
"We've always been a conservatively run company that has funded expansion largely from cash flow," Tim Zagat, copublisher and cofounder of the company with his wife, Nina, told PW. And while the Zagats had always turned downoffers from outside investors in past years, in late 1999 the two decided the time was right to aggressively grow the business and began raising new
Chief among its expansion plans for the next two years is adding more than 100 cities to the roster of 45 cities that its guides currently cover. Zagat hopes to add at least 50 new cities this year, including a large number in international markets with Europe and Asia the target areas. Zagat's international expansion will be helped in part by the improvements the publisher has made to its database. "We have lots more flexibility now," Tim Zagat said, adding that the company can produce such titles as a guide to the best hotels in the world, a book that can be sold in many locations, not only a single city. Not that Zagat has done badly by focusing on guides devoted to a particular municipality. Its guides frequently appear on regional bestsellers lists, with recent hits on both the Washington Post and Boston Globe lists; its largest market is New York, where the company's three titles--the restaurant guide plus New York Marketplace and New York Nightlife--sold more than one million copies last year.
Bookstores are Zagat's largest sales channel, although the corporate market, where Zagat produces customized and private-label guides, is its most profitable. Sales through its recently upgraded Web site (www.zagat.com) have also increased steadily, and Zagat sees the site not only as a sales vehicle, but as a marketing and public relations tool that has given a significant boost to its sales through retailers. Another growing revenue stream is licensing, and the company is actively pursuing more online alliances. Zagat has been particularly pleased with the results from its partnership with NTT DoCoMo's wireless service, where Japanese consumers can access content through their mobile phones. In the U.S., Zagat has agreements with a number of wireless companies, and its content can also be downloaded to handheld devices.
Despite its pursuit of new media, Zagat said his company "is at its core a book publisher. I like books, and all our efforts help us increase our book sales." Zagat has budgeted another 70% jump in book revenue in 2001.
Volume 247 Issue 5 01/29/2001