Business

OpenTable is giving restaurants free mobile sites

Image Credit: MNStudio/Shutterstock

Restaurant reservation site OpenTable is making a bold move, enabling mobile web sites for its restaurant clients. (Disclosure: I own OpenTable stock.)

Despite the rapid growth in broadband and now mobile, many restaurant web sites still look like they were designed in the late ’90s. As diners move to mobile devices, getting the right information is even tougher. In many cases, the site is hard to read because it was designed for a big screen. The information is there, but it requires a lot of zooming and panning. In some cases, these sites are impossible to view because they’re entirely in Flash with no alternative. For a look at some awful restaurant web sites, see this, this, this and this. (Special thanks to Mike Blumenthal and Andrew Shotland for help compiling this list.)

OpenTable is partnering with Palo Alto-based DudaMobile to automatically generate mobile-friendly web sites for restaurants on the OpenTable network. The software makes key information easily accessible on mobile screens with big, touch-friendly buttons.

Mobile represents an important opportunity for OpenTable. In the second quarter, 28% of the company’s 28 million seated diners came from its mobile products, CEO Matt Roberts told me in an interview.

“We launched our mobile applications for the first time in the world at the end of 2008,” Roberts said. “To go from a completely desktop business to 28% today is a massive shift, and it’s a really good thing for OpenTable.”

Wall Street has had concerns about the shift to mobile with companies like Facebook and Yelp. (Disclosure: I’m short both companies.) But unlike Facebook and Yelp, OpenTable doesn’t have to reinvent its business model or convince advertisers to adopt a new ad unit. OpenTable gets paid primarily in two ways: a monthly service fee for each restaurant that covers its use of OpenTabe’s SaaS reservation system and a fee per seated diner. It doesn’t matter if the diner comes from the web site or the mobile app, OpenTable charges $1 per person who makes a reservation. (It only charges 25 cents a head for people who make a reservation through a restaurant’s own web site and doesn’t charge anything for people who call the restaurant and have the host enter the reservation in the system.)

“We don’t have to re-think how we make money on mobile,” Roberts said. “There will be different ways to present it, but the actual transaction itself is the same.”

The automatically generated sites aren’t as elegant as a purpose-built site for mobile. But relatively few restaurants have gone through the trouble of building such sites. Roberts estimates that only about 10% of OpenTable restaurants have special mobile sites.

“Because we’ve decided to take on the cost and the effort to create these sites, we are just knocking down the friction associated with restaurateurs to accomplish what they should be doing strategically, which is having the right solutions in front of smartphone users,” Roberts said. “We’re seeing a massive shift and a positive shift for our business and we want to make sure that that benefit gets over to our restaurant customers on their own destination sites as well.”

The sites highlight key information such as maps, phone numbers and, of course, a link to make reservations.

Founding Farmers in Washington, D.C., and 25 Lusk, in San Francisco, are currently live with the new mobile sites. As a test, I asked OpenTable to generate a site for a restaurant that I selected and the results were very good. (OpenTable spokeswoman Tiffany Fox said it takes seconds to generate a site.)

OpenTable is offering the mobile sites for free for life to any OpenTable restaurant that signs up on or before January 31, 2013. For restaurants that sign up later, OpenTable plans to charge $108 a year.

When talking about local products, I often say it’s important to strike the right balance among consumers, merchants and the company. The OpenTable announcement represents the kind of rare win-win-win that I like to see. Consumers get an easier-to-use site, access to key information, and a quick way to make reservations. Merchants get a free mobile site that they don’t have to maintain separately. And OpenTable gets to expand its footprint and drive additional reservations revenue.

“We’re out and about with our diners, as they’re making decisions about where to go and looking to book,” Roberts said. “If it was Saturday afternoon and they are looking for a place to go out to eat, they’d just pick up the phone and make a reservation. This gives us an opportunity to capture business that we wouldn’t have likely had in the past.”

For existing OpenTable restaurants, signing up for the mobile site should be a no-brainer.

[Top image credit: MNStudio/Shutterstock]


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