Leveraging technology acquired from 2013 acquisition SeatMe, YELP has launched a restaurant reservation service that's integrated with its business pages.
Whereas market leader OpenTable (OPEN) typically charges restaurants a hardware fee, a monthly subscription fee, and a per-diner bookings fee, Yelp's service will be free to any restaurants that has "claimed" its Yelp page.
Yelp suggests the service's feature set won't be quit as robust as that of SeatMe's paid service, which will continue to be offered. The company's main goal: To boost user and restaurant engagement, with the hope that the latter group will be more interested in buying ads to promote their Yelp pages.
Yelp's move comes shortly after TripAdvisor (TRIP) entered the restaurant reservation market by acquiring leading European player LaFourchette; TechCrunch reports the purchase price was $140M. LaFourchette claims 12K+ restaurant partners; OpenTable has an international installed base of 7,721 restaurants at the end of Q1.
OPEN -0.9% premarket. Shares fell last year after Yelp announced the SeatMe deal. Though OpenTable's U.S. dominance is unlikely to be challenged in the near-term, Yelp's offering could gain a following with businesses looking to cut customer acquisition costs and/or are disgruntled with OpenTable's pricing.
OpenTable (OPEN) expects Q2 revenue of $54.7M-$56.3M and EPS of $0.43-$0.48 vs. a consensus of $55.4M and $0.46. Full-year guidance is for revenue of $221.9M-$228.1M and EPS of $1.81-$1.96 vs. a consensus of $225.4M and $1.84.
Seated diners grew 25% Y/Y in Q1 to 46.7M, a slowdown from Q4's 34% clip. OpenTable's installed restaurant base only rose by 30 Q/Q to 31,583.
Reservation revenue +27% Y/Y to $34.3M vs. +33% in Q4. Subscription revenue +13% to $16.6M vs. +12%.
North America still accounts for 86% of revenue; the region's sales rose 17% to $46M. International sales +18% to $45.5M. Excluding an impairment charge, costs/expenses rose 22% Y/Y, exceeding rev. growth of 18%.
BofA/Merrill has upgraded shares to Buy, albeit while keeping its PT at $87.
Sources tell Kara Swisher the move is part of a local content redesign (has strong mobile tie-ins) for Yahoo search, as well as the company's broader efforts (previous) to invest in search tech and thereby reverse long-term share losses to Google.
Bing, whose search engine powers Yahoo's results (Yahoo maintains flexibility in how results are displayed/augmented), has already struck content integration deals with a list of partners that includes Yelp, OpenTable, Facebook, and Twitter. On a global level, the efforts have only had a modest impact on Bing's search share.
In tandem with its Q4 report, OpenTable (OPEN) has announced it's acquiring Ness Computing, developer of an iOS app that offers personalized restaurant recommendations, for $17.2M ($11.3M net of estimated cash on hand).
OpenTable suggests it will use Ness' team and technology to improve the restaurant discovery/recommendation features of its own apps; Ness' app will be discontinued. The deal comes a year after OpenTable acquired Foodspotting, maker of a well-used app for finding and sharing restaurant dishes.
Shares have added to their AH losses, as OpenTable's soft EPS guidance (the result of aggressive 2014 investment plans) overshadows a Q4 beat. The company's seated diners rose 34% Y/Y in Q4 to 44M, and its installed restaurant base 15% to 31.5K.
OpenTable (OPEN) expects Q1 revenue of $53.3M-$54.9M and EPS of $0.39-$0.43 vs. a consensus of $54.3M and $0.54. Full-year guidance is for revenue of $221M-$229M and EPS of $1.71-$1.92 vs. a consensus of $223M and $2.21. Shares -1.9% AH. (Q4 results, PR)
NCR expects 12%-14% 2014 revenue growth and EPS of $3-$3.10. The consensus, which might not fully take into account the recent Digital Insight and Alaric Systems acquisitions, is for 7.5% revenue growth and EPS of $3.10. Shares -6% AH. (Q4 results, PR)
ON Semi (ONNN) expects Q1 revenue of $695M-$725M, above a $675.5M consensus. Shares +4% AH. (Q4 results, PR)
Audience (ADNC) expects Q1 revenue of $33M-$36M and EPS of -$0.17 to -$0.21 vs. a consensus of $33.5M and -$0.09. Shares unchanged for now. (Q4 results, PR)