Google May Have Pulled A Sneaky Trick To Avoid Government Review Of Its Zagat Deal

Google CFO Patrick Pitchette

How is Google getting away with acquiring Zagat for a reported $125 million without having to go through the government’s normal antitrust review of acquisitions that size?Greg Sterling of Screenwerk has an idea:

How did Google pay $125 million and avoid federal review of the transaction (as required by Hart-Scott-Rodino)?

One potential answer came to me today in an email from a smart reader suggesting that much of the money was probably treated as compensation for the founders over time. There’s some legal but creative accounting probably going on that keeps the official purchase price below $66 million but awards the remaining $59 million in salaries or other deferred compensation to Tim and Nina Zagat, who are staying on as “co-chairs.”

While that’s probably not the only reason they’re staying on it’s likely one of them: to compensate the Zagats in a way that avoids government review of the transaction.

Go read Greg’s whole clever post >>

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