YP, a local search platform for more than 80 million people across the U.S., announced that participating GrubHub restaurant listings will be integrated across YP’s flagship consumer brands, including YP.com and the YP mobile app. The integration will allow YP users to view menus and place orders directly on information pages for restaurants.

Consumers will now find a more seamless transaction within the YP environment when conducting local searches, finding menu items and ordering food from GrubHub listings. The goal for YP is to have more traffic to its owned and operated properties and to have a stake in point of sale transactions.

GrubHub Inc. is an online and mobile food-ordering company that connects users with local takeout restaurants.

This partnerships with GrubHub comes after YP announced it generated nearly 400 million in mobile advertising revenue in 2013. YP is continuing to strengthen their mobile offerings to attract consumers who are more mobile than ever before.

YP has a clear focus on evolving the consumer experience from a local search perspective.

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photo courtesy of Crain’s Chicago Business

All eyes are on “local” this morning on Wall Street, with GrubHub‘s IPO off to a great start. The company has placed 7.4 million shares priced at $26, or $192.4 million. The shares closed at $34.

We’ve been watching GrubHub’s IPO with real interest. The Chicago-based online take out ordering company — which merged last August with Seamless, its primary competitor — represents a key local “food” anchor, along with Open Table, UrbanSpoon, Groupon (reservations); Yelp and Google+ (reviews); and eventually, Amazon, WalMart, Google,eBay, TBD (grocery delivery).

It has 28.8K restaurants and 135,000 daily orders. Forty-three percent of its activity now takes place from mobile devices, a key metric in this space which relies on impulse purchasing. The company has operations in most major U.S. cities, but is strongly penetrated in several.

In this area, which might loosely be termed as “food,” the silos are falling fast — they each do a little of each. We expect to see a major land grab by the key players that are already in the space, and the possible addition of other tech and retail players.

At its most basic level, GrubHub views, confirms and tracks food orders, It makes its money from commissions of roughly 10-12 percent. Last year, it made $137 million. But the company’s value extends beyond order taking. It acts as a giant search and discovery engine that can bring customers back to locations, and recommend others when they are in the mood for something else.

The cost to use GrubHub is relatively high. There have been anecdotes in the press about some restaurants quitting GrubHub, seeing a drop in orders, but making higher profits. Obviously, these reports are not the general consensus, as the company continues to grow.

But the best way for restaurants to justify its cost is if they chalk it off as a promotional expense. GrubHub executives like to point out that it is ultimately cheaper and more retentive to spend on GrubHub than on a deals site such as Groupon, with its high commission structure taking 30-50 percent, on top of high discounting off menu prices.

While GrubHub has a nice lead in this space for now, the key for it now will be to extend its brand and reach. Its brand awareness remains low, and it is mostly known among niches such as office workers and college students. The company’s current competitors include Delivery.com, which claims a roster of almost 10,000 restaurants in 50 cities; and Eat24.com, which covers 20,000 restaurants in 1,000 cities across the country.

We’ll be watching for activity from companies such as Yelp, Google and other players too, either via start up or acquisition.

The post GrubHub IPOs: Thoughts About GrubHub and the ‘Food’ Segment appeared first on BIA/Kelsey - Local Media Watch.

photo courtesy of Crain’s Chicago Business

All eyes are on “local” this morning on Wall Street, with GrubHub‘s IPO off to a great start. The company has placed 7.4 million shares priced at $26, or $192.4 million. The shares closed at $34.

We’ve been watching GrubHub’s IPO with real interest. The Chicago-based online take out ordering company — which merged last August with Seamless, its primary competitor — represents a key local “food” anchor, along with Open Table, UrbanSpoon, Groupon (reservations); Yelp and Google+ (reviews); and eventually, Amazon, WalMart, Google,eBay, TBD (grocery delivery).

It has 28.8K restaurants and 135,000 daily orders. Forty-three percent of its activity now takes place from mobile devices, a key metric in this space which relies on impulse purchasing. The company has operations in most major U.S. cities, but is strongly penetrated in several.

In this area, which might loosely be termed as “food,” the silos are falling fast — they each do a little of each. We expect to see a major land grab by the key players that are already in the space, and the possible addition of other tech and retail players.

At its most basic level, GrubHub views, confirms and tracks food orders, It makes its money from commissions of roughly 10-12 percent. Last year, it made $137 million. But the company’s value extends beyond order taking. It acts as a giant search and discovery engine that can bring customers back to locations, and recommend others when they are in the mood for something else.

The cost to use GrubHub is relatively high. There have been anecdotes in the press about some restaurants quitting GrubHub, seeing a drop in orders, but making higher profits. Obviously, these reports are not the general consensus, as the company continues to grow.

But the best way for restaurants to justify its cost is if they chalk it off as a promotional expense. GrubHub executives like to point out that it is ultimately cheaper and more retentive to spend on GrubHub than on a deals site such as Groupon, with its high commission structure taking 30-50 percent, on top of high discounting off menu prices.

While GrubHub has a nice lead in this space for now, the key for it now will be to extend its brand and reach. Its brand awareness remains low, and it is mostly known among niches such as office workers and college students. The company’s current competitors include Delivery.com, which claims a roster of almost 10,000 restaurants in 50 cities; and Eat24.com, which covers 20,000 restaurants in 1,000 cities across the country.

We’ll be watching for activity from companies such as Yelp, Google and other players too, either via start up or acquisition.

The post GrubHub IPOs: Thoughts About GrubHub and the 'Food' Segment appeared first on BIA/Kelsey - Local Media Watch.

Online restaurant ordering and discovery giants GrubHub and Seamless have agreed to merge their operations, creating a single company. Chicago-based GrubHub currently serves more than 20,000 food ordering establishments in 500 cities, while New York-based Seamless serves more than 12,000 food ordering establishments in 400 U.S. cities plus London.

GrubHub CEO Matt Maloney, who co-founded the company in 2004, keeps the CEO job. Seamless CEO Jonathan Zabusky becomes president. Zabusky recently came on to spin off the operation from Aramark, the corporate catering giant.
The two companies had been going head-to-head in a number of their markets. Both share a vision of the food ordering business being rapidly transformed via smart phone.

We had an extensive discussion with Zabusky in March. At that time, he noted that Seamless had two million regular users and grossed $85 Million in topline revenues in 2012. It projects $100 million in top line revenue in 2013, with major growth seen in coming years.

The company has had a strong foothold in the corporate market, providing food ordering and delivery to law firms, tech firms and investment houses. But its major effort has been focused on the consumer side, which has been experiencing year-over-year growth of 60 percent.

The company has 300 people in three major offices, as well as field based sales. While it is best known for its strong business in Manhattan, where it recently opened a 28,000 square foot facility,, Zabusky notes that the company has a strong presence in 13 major U.S. markets. He added that Seamless had “a major national expansion strategy,” and was well-situated to execute it with a customer care center in Salt Lake City.

The key to growth, said Zabusky, was to keep selling new products and features to its food establishment partners. “We don’t make money unless they make more money.”

Zabusky noted that Seamless has been processing electronic order forms, and providing electronic terminals. plus table side ordering apps. Generally, its focus is to move restaurants away from fax machines, and away from phone calls and paper, which he says remains the segment’s biggest competition.

With Seamless, restaurants move up to a “multi-platform portal,” where they could “view, confirm and track orders,” he said. Restaurants also leverage Seamless and its vast network for discovery and retention. For instance, it offers different deals on different days to keep customers coming back. “It is very different than the daily deals space,” he said.

The industry’s transformation via mobile, however, is expecially key. Zabusky says it represents 40 percent of the total business, up from 10 percent a year ago. But for online food ordering, mobile doesn’t just represent a phone. The company’s best customers use the PC-based Web, phones and tablets, he says. “Thirty percent of the mobile volume comes from the iPad.”

After the merger is completed, major competitors for the combined company will include Living Social, which has recently bet big on online food ordering; Delivery.com, which claims a roster of almost 10,000 restaurants in 50 cities; and Eat24.com, which covers 20,000 restaurants in 1,000 cities across the country.

The post GrubHub, Seamless Merge; Mobile Drives Food Ordering Growth appeared first on BIA/Kelsey - Local Media Watch.