This Is When I'll Buy OpenTable

OpenTable (Nasdaq: OPEN  ) is one of the newer and more interesting picks in our Motley Fool Rule Breakers portfolio, but I won't be buying shares soon. I'd prefer a Web 2.0 service that, well, acts like one.

This isn't to say that I dislike OpenTable, whose website is a portal of the reservations systems of more than 11,000 eateries. There's a lot to like about the service in general, and the iPhone app in particular. On-the-go restaurant reservations have never been easier to come by.

So what's the problem? OpenTable is self-contained. It's frustrating to open Yelp, a useful service for which Google (Nasdaq: GOOG  ) recently bid $500 million, and find there's no way to reserve a table at a newly discovered eatery. There's no partnership with OpenTable. 

But it's actually worse than that; OpenTable has zero Web 2.0 partnerships. You can't post OpenTable reviews to Twitter. And unlike IAC's (Nasdaq: IACI  ) Urbanspoon, you can't share reviews with Facebook friends. Yahoo!'s (Nasdaq: YHOO  ) varying social services? They're nowhere to be found, either.

This matters because a new generation of Web services is emerging that make hay from connectivity. Twitter leads this group. The microblogger's programming interface, otherwise known as an API, grants coders access to the underlying platform. Consequently, developers are writing software to extend it, just as they do for Apple's (Nasdaq: AAPL  ) iPhone App Store. Today, private equity investors call Twitter a billion-dollar platform.

OpenTable is losing an opportunity by not being more open. Witness Foursquare. With this service, another among the new generation of open Web services, users pile up points when they "check in" to locations such as -- wait for it -- restaurants. You know what Foursquare links to if you want more information about the restaurant you're heading to right now? Yelp.

(Sigh.)

It's time to take down the "closed" sign, OpenTable. Do that, and then maybe I'll consider buying shares.

Google and OpenTable are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy still remembers its glory days ruling the handball court.


Read/Post Comments (5) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 22, 2009, at 5:06 PM, Fool wrote:

    Open table makes money. Those others are losers. Web 2.0 is a joke. How bout money 2.0?

  • Report this Comment On December 22, 2009, at 6:33 PM, TMFMileHigh wrote:

    Fool,

    Twitter makes money:

    http://www.businessweek.com/technology/content/dec2009/tc200...

    OpenTable will likely make money for a long time to come, but failing to embrace an open API leaves a gaping hole in its competitive strategy, in my view.

    That's why, right now, I'd take Twitter over OpenTable.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On January 04, 2010, at 2:07 PM, Gtrinvestor wrote:

    Hey, a real genuine article with actual insight... hooray! Thanks for the insights on this one. I may not totally agree, but these are some links that are food for thought.

  • Report this Comment On January 10, 2010, at 1:50 PM, richnasser wrote:

    Hi,

    i post my reservations and the reviews I give restaurants to my FB page.

    It works!

    Rich

  • Report this Comment On January 10, 2010, at 1:56 PM, richnasser wrote:

    to be more clear, I mean when you book your reservation from OpenTable, you get the option to paste the reservations on your FB page.

    After the meal you can post your review as well. Not sure about Twitter though.

    Also, I've booked with OpenTable from a restaurant's FB page. Worked great too!

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