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