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Zagat Publisher Seeks Buyer

A "clever and sharp" restaurant guide company with "telling" rankings and "a penchant for quote marks" from its thousands of "in-the-know" reviewers is "on the block."

Zagat Survey, the guide empire that started as a hobby for Tim and Nina Zagat in 1979 as a two-page typed list of New York restaurants compiled from reviews from friends, has been put up for sale, according to people briefed on the decision.

The Zagat family has hired Goldman Sachs to seek a buyer for the company, which since its founding almost three decades ago has become part of the global culture: the company sold 5.5 million guides last year in more than 100 countries and has a Web site with 1.5 million registered users.

Its slim burgundy guides are no longer limited to restaurants but also contain rankings and reviews of hotels, nightlife, golf courses, spas and more. Zagat’s guide to restaurants in Paris sells more copies than France's own Michelin series.

The sale is likely to attract broad interest and the company could become a trophy asset for a media mogul seeking a bit of extra gloss and power. The business could as naturally end up in the hands of Barry Diller's IAC/InterActiveCorp , which owns Citysearch, as it could in Bruce Wasserstein's company, publisher of New York Magazine, or even in Rupert Murdoch's News Corporation.

While Zagat (pronounced zuh-GAHT) is considered the nation's pre-eminent populist printed restaurant guide, less traditional buyers may find its online business its most attractive and underleveraged. Cellular telephone carriers like AT&T Wireless and Verizon Wireless could use it to build exclusive mobile content. Internet start-ups like OpenTable.com, which allows users to book restaurant reservations online, could pair its services with Zagat's rankings.

Its image as a brand for affluent people could also be attractive to other suitors like the credit card companies American Express or Visa, which are courting high-end consumers, or even to a luxury company like the LVMH Group, which could turn Zagat into a lifestyle brand.

A spokeswoman for Zagat declined to comment.

The Zagats, who met at Yale Law School, could not find a publisher for their annual Manhattan restaurant rankings guide in the early 1980s, so they began publishing it themselves and delivering copies to any bookstore that would stock them. They set up a publishing company in part to get tax deductions for meals.

The business has since expanded wildly with international guides in multiple languages and into new categories. The company also began making custom guides for corporations. For example, Walt Disney commissioned a guide for attractions at its theme parks and WellPoint, the health insurer, commissioned a guide on doctors in its network. In both cases, the rankings and reviews were completed independently of the companies that paid for them.

Zagat has tried to build its online business, but it has largely remained a paid subscription service, preventing it from becoming a magnet for users and advertisers.

In recent years, the company has struck a series of alliances, most recently with Facebook. It also has a content distribution agreement with Google so that Zagat content pops up on Google Maps, and with Priceline.com, which offers rating and reviews on its home page using Zagat content.

Mr. and Mrs. Zagat’s son, Ted, joined the company, rising to president, and led efforts to increase its business online until he left last January to become a vice president at Univision.

"What I think is in the minds of Tim and Nina is that they have taken it to a certain level," said Peter A. Georgescu, a longtime friend of the Zagats and the chairman emeritus of Young & Rubicam. "It’s a fabulous brand, but they need the kind of resources that organic growth cannot sustain."

It is unclear how large a price Zagat will attract. While the company is a worldwide brand, its actual business is much smaller. People briefed on the company’s finances suggest the company could be valued at more than $200 million, which would still be a drop in the bucket for an Internet company or a wealthy executive.

In 2000, Zagat was valued at more than $100 million when the family sold a third of the business to an investment group led by General Atlantic Partners, a private investment firm based in Greenwich, Conn. The other institutional investors were Kleiner, Perkins, Caufield & Byers, one of Silicon Valley’s best-known venture capital operations, and Allen & Company, the media investor and adviser.

Nathan Myhrvold, a former chief technology officer of Microsoft , also invested, as did Nicholas Negroponte, director of the media laboratory at the Massachusetts Institute of Technology and the founder of One Laptop Per Child, and Nancy Peretsman, an Allen & Company investment banker.

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