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Facebook's OpenTable Integration Could Raise Social Traffic


OpenTable is on a roll, and its new partnership with Facebook should prove to be valuable to investors and consumers. At the same time, competition is growing.

Editor's Note: This content was originally published on by Louis Bedigian.

OpenTable (NASDAQ:OPEN) closed up 7.66% Monday afternoon after the company announced a new partnership with Facebook (NASDAQ:FB).

According to TechCrunch, Facebook users will now be able to book reservations from the Facebook pages of 20,000 different restaurants in North America.

This is the latest development in the company's ongoing strategy that it hopes will redefine the restaurant reservations industry.

Last month OpenTable formed a partnership with IAC's (NASDAQ:IACI) Urbanspoon. Through that partnership, OpenTable became Urbanspoon's provider of restaurant reservations in North America. OpenTable also acquired Rezbook, which served as Urbanspoon's reservation management system.

In June, OpenTable acquired JustChalo, a technology company that focuses on the restaurant industry, for $11 million in cash and stock. At the time of the acquisition, OpenTable seemed to be particularly interested in gaining the talent (engineers) that JustChalo had to offer.

Facebook is not the only site or app that has been upgraded with OpenTable features. In March, Evernote partnered with OpenTable to allow users of its food app to book reservations at their favorite restaurants. This prevented Evernote Food users from having to exit the app (and load another program or website) to make a reservation.

On January 29, OpenTable acquired Foodspotting, an app that specializes in finding and sharing popular restaurant dishes, for $10 million.

While some analysts have been cautiously optimistic about OpenTable's future, the company has been gaining investor interest. Year-to-date, the company is up more than 33%.

The market is so attractive to investors (and most of all consumers) that other players are beginning to invade OpenTable's territory.

The company faces new competition from startups like NoWait, a waitlist and seating tool for casual dining restaurants. While NoWait's customer base (16 million guests have been seated over the last few years) is small compared to OpenTable's (490 million diners have been served) clientele, the company is growing and was recently featured on Bloomberg TV.

On July 1, Groupon (NASDAQ:GRPN) -- a company that is famous for offering massive discounts at restaurants, retailers and other destinations -- announced a new service called Groupon Reserve.

Unlike OpenTable, Groupon Reserve is not exclusive to food. The company describes the service as one that allows its merchants to "attract high-quality customers for luxury products and experiences."

On July 18, Yelp (NYSE:YELP) acquired SeatMe -- a reservation solution for the restaurant and nightlife categories -- for $12.7 million.

After OpenTable made its announcement Monday, Yelp took a slight dive and closed down just over 2%.

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