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Over the last few weeks the online dining & reservation space has become increasingly competitive with large consumer favorites including Yelp (NYSE:YELP) positioning for a piece of the action. Up until this point the industry has been dominated by a single firm, OpenTable (NASDAQ:OPEN) and a number of smaller start up firms looking to make a dent in their own local markets.

Earlier this month, Yelp, a global consumer review company announced it would be entering the online ordering space with an acquisition of SeatMe, a small $12.7 million deal. While Yelp has focused attention on driving revenues from online advertising, the street has actively criticized and bet against the future potential of the company, as seen in the most recent short interest data.

With the deal, Yelp will be able to leverage its customer base and traffic to build up the start up brand. A little background on SeatMe, the company provides technology solutions to make managing reservations easy and affordable to a restaurants. SeatMe costs less for business and restaurant owners in both set up, ongoing, and per customer fees in comparison to OpenTable. The news of the acquisition comes after Yelp announced plans to offer a direct commerce and ordering platform to the traditional website. The new platform will initially just offer customers the ability reserve, order, and pay for restaurant transactions listed on the website. From what I can tell, the new platform will be similar in functionality and structure to my college favorite, GrubHub. GrubHub provides local deals and ordering functionality for local restaurants and chains. One of the many deals offered is the $5 large Domino's (NYSE:DPZ) pizza, you can't beat that.

In the remainder of this short article I would like to look at the relevance of each of these companies using Google search trend data. Google (NASDAQ:GOOG) gives users the ability to instantly find the popularity of certain keywords over set periods of time, all the way back to 2004. For the first search I wanted to look the keyword "Yelp" on Google:

Google is reporting that during the month of July, a score of 100 will be reported, or the highest all time level of interest for the company. Following this high, it is forecasted the company will set yet another high next month before pulling back slightly. The dashed line represents the forecasted interest for the next 12 months, as provided by Google. The funny thing is, the above chart looks eerily similar to that of the share price as of late. While I cannot determine the magnitude between the correlation of revenues and search interest today, I think it is logical to assume there is a positive one as Yelp derives all of its revenues through its online websites. Going forward, I feel the launch of the new platform, during record interest for the company, will provide an interesting and new revenue stream for the company. Let's now take a look at the search interest for the keyword "SeatMe" on Google:

While the above data is limited and greatly affected by the recent acquisition news, we can still see a clear trend prior to the drastic spike upwards. I will be watching this data to see if the level of interest remains in an upward trend excluding the most recent spike. Lastly, let's take a look at the keyword "OpenTable" on Google:

While off the highs earlier in the year, the search interest data has stayed in an uptrend over the last decade. Over the coming months it will be interesting to see if the recent upswing in competition will have an affect on the data.

Conclusion

Online dining is getting hot, a number of smaller competitors and larger players alike are getting involved within the industry. Using search engine data we can see the strength within the Yelp and SeatMe brands. Over the course of the year Yelp will be looking to expand the number of offerings on the new platform to include services other than dining. Who knows, one day Yelp could be the one stop shop for reviews, reservations, booking, and transacting. I plan on giving updates on this data in the months ahead either in article form, or on my blog. You can view the search engine data for yourself here!

Source: Google provided all of the search interest data.

Source: Yelp: At All Time High Search Interest