I’ve often argued that the proliferation of mobile devices changes everything, and OpenTable (s OPEN), a San Francisco-based company that was founded in the Web 1.0 days, is certainly benefitting from the growing number of smartphones. OpenTable allows folks to make reservations at restaurants over the Internet. It announced its second quarter 2010 earnings yesterday, and a number caught my eye that tells me the company might be on the verge of major mobile transformation.
According to OpenTable, of the 17 million total seated diners during the second quarter, nearly 1.3 million came from the company’s mobile apps. In the first quarter of 2010, of 15.6 million seated diners, about one million diners came from mobile users. Since it first started offering mobile apps in 2009, OpenTable has in total seated around 4 million diners via mobile devices — with 2.3 million of those signing up in 2010. I’m one of them, and find it more convenient to use the app to make a reservation minutes after I am done making plans to dine out.
Smartphones are to computing what mobile phones were to communication. Mobile phones made it possible to talk to anyone, anywhere. Smartphones (and other such devices) free computing from the shackles of a desk. Now we can compute everywhere, which means we can browse and do short tasks wherever we are. From that perspective, we’re going to see more and more usage of web-based services such as OpenTable. I’d go out on the limb and say that in a couple of years, a majority of OpenTable’s diners will be coming from the mobile apps. For another company benefitting from this shift, check out Pandora.
According to Morgan Stanley’s Mary Meeker, today nearly 7.5 percent of OpenTable’s “seated diners” are coming from mobile applications, a share which is going to increase as the company launches newer apps. OpenTable recently released an iPad app, which is getting a lot of traction, according to Meeker.
From my perspective, I’d say OpenTable needs to add some additional functionality. For instance, it should be looking at ways to transform itself from just being a reservation service to being a combination of Yelp, Gowalla and Groupon. (Since OpenTable doesn’t have a market cap ($1.1 billion) big enough (or pockets deep enough with about $87 million in cash) to buy these companies, it would be better off partnering with one or more of them.
OpenTable has the database of places which are actually interesting to people, and customer feedback about a restaurant. It has the actual data which shows how many times people have visited a restaurant. I’d bet they have the data on how many people abandon a restaurant. That data could be used to build new behavior patterns, including loyalty programs to reward the loyalists and lure in the holdouts.
OpenTable CEO Jeff Jordan is an astonishingly smart guy — I met him once and I know that for a fact — so I’m sure there is more than a good chance he’s already thinking along those lines. If not, he should.