- 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 (NASDAQ: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 (NASDAQ: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.