Yelp expands to restaurant reservations, delivery

Yelp has acquired mobile reservations service SeatMe in a move designed to deepen the review website’s relationships with local businesses and compete with FourSquare and Square, both favorites among local businesses.

The $12.7 million acquisition, which the company announced Thursday, offers Yelp more inroads with local bars and restaurants, many of which are using online services and mobile apps to seat their customers.

But the purchase ruffled a few feathers over at OpenTable, the San Francisco-based SeatMe competitor that Yelp currently uses to power its online reservations. The SeatMe deal is likely to complicate that arrangement, and Open Table stock fell Thursday and continued its downslide on Friday, plummeting more than 6 percent.

But CEO and Co-founder Jeremy Stoppelman suggested in a company news release that Yelp will continue to use both services: “We believe SeatMe will add online reservation capabilities to a broader market while complementing our existing partnerships.”

He added: “Additionally, SeatMe provides us with yet another way to close the loop between local businesses and consumers.”

San Francisco-based Yelp has made as series of strategic moves to strengthen ties with local restaurant, hospitality and retail businesses, and expand its platform with tools to drive business to offline and small merchants.

Earlier this month, the company announced its entrance into food ordering and delivery through partnerships with Eat24 and Delivery.com. The partnership has been a boon for Eat24 – the San Franciscostartup received about 1,000 sign-up requests from restaurants within the first couple of days.

The food ordering and delivery services are part of the new Yelp Platform, a recently launched web service for facilitating online transactions.

Stoppelman writes on the company website that “Yelp Platform will eventually make it a whole lot easier to do everything from scheduling spa treatments and yoga sessions to making dentist appointments and purchasing services.”

Yelp employees have been getting offline more, too, hosting small business forums at bars and cafes across the Bay Area, where business owners share ideas about everything from how to use social media to dealing with an angry customer. Yelp also organizes parties and mixers to schmooze local businesses, and has designated “community managers” who work directly with business owners.

Square, too, recently launched a series called “Let’s Talk,” in which CEO Jack Dorsey travels to cities to talk with small business owners about best practices and technology resources. Dorsey said recently in an interview with the Mercury News that he’s hosted events in San Francisco, Oakland and Stockton, and wants to visit rural communities and blighted towns across the U.S.

Square is also building a recommendation engine that could challenge Yelp, as The Verge recently reported. The recommendation engine will someday suggest places to visit based on a customer’s previous purchase history.

And the company’s online marketplace, unveiled last month, has grown quickly with artisans and small merchants across the country who want to take advantage of the free website and Square’s marginal transaction fees.

Image courtesy nytimes.com

Heather Somerville Heather Somerville (221 Posts)

Heather Somerville is a business reporter covering venture capital and startups for the Bay Area News Group.