Implications of Yelp's Deal With OpenTable

As my colleague Mike Boland has reported, OpenTable has opened its network a bit, allowing registered Yelp users to directly make reservations from Yelp — whether they have registered with OpenTable or not. Users who have registered with both services will automatically get the benefits that OpenTable provides (i.e., dining credits). But they don’t have to.

The immediacy of linking Yelp’s reviews with reservations should prime the pump for OpenTable, and get more customers to ultimately register. Among OpenTable’s 11,000 restaurant customers in North America, there probably isn’t a single one without a Yelp review. OpenTable also says it won’t water down the comprehensive customer info that OpenTable has on every registered diner (i.e., missed meals, preferences, etc.). It will simply keep files on customers that come in with Yelp IDs.

OpenTable, in general, is aggressively moving to bring more diners and restaurants into its system. Another move the company recently made was the launch of OpenTable Connect, a Web-based reservation system that restaurants can use in lieu of the core OpenTable system. OpenTable Connect, which is aimed at mid-priced restaurants, such as bistros and sushi houses, costs $49 a month, and $2.50 per diner. More than 82 restaurants are currently signed on.

OpenTable’s moves come as it deals with more competition. CityGrid Media’s Urbanspoon, for instance, has launched two complementary reservation products that undermine OpenTable’s fees — and open new fronts in the battles of Yelp vs. Citysearch and now OpenTable vs. Urbanspoon/CityGrid Media.

The first of Urbanspoon’s new products is Urbanspoon Rez, an online reservations system that is now in 170 restaurants in Los Angeles and Seattle and ready for national rollout. The second is Urbanspoon RezBook, an iPad-based system that directly mirrors OpenTable’s proprietary Electronic Reservations Book computer. RezBook is now in pilot mode in five restaurants. A new report on Urbanspoon’s strategy is being released today for clients of BIA/Kelsey’s Marketplaces program.