Even if your favorite restaurant is closed for the day, you can still try to reserve a table through OpenTable. The firm provides online reservations at about 20,000 upscale restaurants in the US, Canada, and Mexico, as well as Germany, Japan, and the UK. The service is free to diners, but OpenTable charges participating restaurants an installation and monthly license fee for its Electronic Reservation Book (ERB), a computerized reservation system. It also provides training and support for ERB, and charges a fee for tables booked through Connect, a Web-based solution for reservations with less functionality than ERB. Since its founding in 1998, OpenTable has seated more than 200 million diners.
Restaurants pay between $200-$300 per month for an OpenTable subscription; they pay $2.50 for each reservation made through Connect, and $1 per diner booked directly through OpenTable.com. The company reported strong 2010 results thanks to an increase in participating restaurants and diner reservations. That year its revenues reached nearly $99 million, a more than 40% increase in revenues from the $68 million reported for 2009, and the company nearly tripled its net income from $5 million in 2009 to $14 million in 2010. The growth in restaurants and diners was mostly the result of OpenTable's 2010 acquisition of toptable.com, a UK-based restaurant reservation website, for about $55 million. The deal gave it access to toptable's more than 3,600 restaurant customers across Europe.
Before its acquisition of toptable, OpenTable opened its wallet in 2010 to purchase Table Maestro, a company that operates a telephone reservation management service for restaurants, for $1.5 million. The previous year it bought guest management solutions firm GuestBridge for some $3 million in cash. GuestBridge provides software for reservation, wait, and table management. On the technology front, OpenTable has been focusing its efforts on applications for smart phones. In 2010 the company reported that it had seated more than 700,000 diners cumulatively through its mobile applications. The firm is additionally working to introduce new marketing solutions; its Spotlight program, launched in 2010, is a Groupon-like service that sells coupons from local restaurants to OpenTable diners.
The company's decision to go public in 2009 surprised many given the dismal economy. (There had been no IPOs up to that point since 2008's Grand Canyon Education.) OpenTable owed at least part of its success to the fact that it doesn't rely on an advertising model for its revenue stream, maintaining restaurants as its only clients. The company used proceeds from its IPO for sales and marketing activities, general and administrative expenses, investing in technologies, and acquiring other businesses. – less