Open Table Priceline

The Internet travel booking company Priceline announced today it will acquire the online restaurant reservation service OpenTable for $103 a share. The all-cash deal will cost Priceline a total of $2.6 billion.

The deal is expected to officially close sometime in the third quarter of 2014. When that happens, OpenTable will be run as an independent business within the Priceline Group. OpenTable will continue to be based in San Francisco and lead by its current management team.

Darren Huston, the President and CEO of The Priceline Group, stated today:

"OpenTable is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly-valued booking experience for our global customers. We look forward to helping the OpenTable team accelerate their global expansion, increase the value offered to their restaurant partners, and enhance the end-to-end experience for our collective customers across desktop and mobile devices.!

Formed in 1998, OpenTable allows its users to reserve seats at over 31,000 restaurants in the U.S, Canada, Mexico, the UK, France, Germany and Japan. The company says it has seated over 125 million people in those restaurants since launching its first mobile apps in 2008.

Source: Priceline

 
There are 10 comments

deuxcv says:

$2.6 billion for a company that has seated 125 million guests in it's 16 years of existence. that's $21 for every transaction they've ever generated. or that's $84,000 for every restaurant that uses the service. seems to me that priceline could have penetrated the market a lot better had they spend a few hundred million developing a kickass product and then giving 2 million restaurants a $1000 signing bonus to use their system.

Deke218 says:

Must be nice to have money to burn.

eahinrichsen says:

Well, the customer-facing reservation system is only part of what OpenTable does. They also sell dining room management and customer management software to restaurants. It's still a LOT of money, but the service isn't quite as easily reproducible as you'd think.

Mobius360 says:

2 billion for the Clippers apparently was a steal.

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TheDu9du says:

no offense, but who even does reservations? unless you're bringing >6 ppl I don't see the point.
One time i go to a A-listed restaurant and they ask about my reservation, and i look around, and see only 4 of the 30+ tables in use. I'm like: no. so?
Nevertheless, i got to eat there, but seemed unpleasant to get asked that, and have them act like "wow, you just can't do that".

They ask about reservations because people celebrate things and have special needs. Doesn't matter if there are three tables at three hundred. Its a polite thing to do not a nuisance. I make reservations so I am not lumped in with people who don't.

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Mighty_Red says:

The clue is in the word "reserve". You can't just rock up to a nice restaurant and expect there to be a table free for you, not on a Friday or Saturday night. If there's tons for free tables, great but if they're fully booked then that's your plans ruined and you'll have to go somewhere else.

Also, by using opentable and other sites you usually get access to offers that you won't get by just turning up like 50% off, free drinks etc.

turbo2pointo says:

That just mean that you haven't visit some fully booked A-listed restaurants enough.
Some of these are fully booked 2 weeks ahead.

Even if you know the restaurant is usually 70% full on Friday night, do you still want to take the chance if you are taking your client there?

Facepalm

eahinrichsen says:

This might actually work out pretty well for me. I use OpenTable all the time, since it's a really easy way to make sure my restaurant reservations integrate with my TripIt itinerary. Hopefully Priceline will be aggressive in getting new restaurants into their network.

atishc says:

OpenTable is a really nice service, a very nice app (particularly for the iPad), and a decent rewards system. If this expands the number of restaurants in the network, that's great, but I worry that this kind of acquisition will make the service worse for consumers in some way. (Zagat was totally ruined by Google and is no longer a useful service at all.)

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