Yelp Inc (YELP) & OpenTable Inc (OPEN): Online Dining Is Getting Hot

While large deals have been few and far between over the last few years, some big companies whom you may be very familiar with are making small deals as of late.

A company in which I personally use quite often, Yelp Inc (NYSE:YELP), announced late last week it would be pursuing market share within the increasingly competitive restaurant reservation business.  On Thursday the company announced it would be acquiring a recent start up, SeatMe, for $12.7 million in cash and stock. While a relative newcomer within the reservation space, SeatMe has be growing in popularity due to its simplicity for both customers and local restaurants alike.

Founded in 2011, SeatMe provides technology solutions to make managing reservations easy and affordable to a broad array of restaurants and nightlife establishments. The deal should allow Yelp to move even closer to being the one stop shop for every restaurant consumer.

By leveraging SeatMe through Yelp Inc (NYSE:YELP)’s current industry position and technology, one million U.S. businesses listed on Yelp in the restaurant and nightlife categories will come even closer to their target audiences. This deal comes after the news earlier in the month where Yelp Inc (NYSE:YELP) announced it would be launching a platform that allows local businesses to take orders and have transactions processed through its websites. By allowing customers and clients, to reserve, order, and pay for their transactions directly though Yelp, the company is adding a potentially lucrative revenue stream to its advertisement supported revenues.

Daily deals?

However, Yelp Inc (NYSE:YELP) isn’t the only one looking to make a dent in the online dining industry. While Groupon Inc (NASDAQ:GRPN) is well of the highs seen after its initial public offering near the end of 2011, shares have done exceptionally well over the last 6 months as fears of bankruptcy have subsided. Earlier this month the company announced it would be looking to combine its daily deals service with the online booking trend to open up an entirely new revenue stream. The service, Groupon Reserve, is said to be “the premiere destination for the finest things to eat, see, do and buy.” Early on customers were welcomed to steep discounts of almost 40% to some of the best local restaurants.

I like this move by management, by combining the company’s traditional discount business model with the new online booking trend, the company is setting itself apart in the competitive industry. More over, small business owners whom have used the website, or new restaurant owners all together, may be looking to Groupon Inc (NASDAQ:GRPN) over Yelp. New owners especially may not have built a significant reputation on Yelp Inc (NYSE:YELP), therefore may be overlooked on the website.

Who hurts?

The relative veteran in the online reservation space, OpenTable Inc (NASDAQ:OPEN) may be facing growing competition in the near future.

Imitation is the sincerest form of flattery right?