Yelp will acquire SeatMe for approximately $2.2 million in cash and up to approximately 263,000 shares of its Class A common stock, for a total purchase price of approximately $12.7 million (subject to customary working capital adjustments). The transaction, which has been approved by the boards of directors of both companies, is subject to approval by the SeatMe stockholders and the satisfaction of customary closing conditions.
Yelp plans to use the SeatMe to create online reservations and appointments for “thousands of currently unserved businesses.” SeatMe is a direct OpenTable competitor (Yelp has an affiliate relationship with OpenTable). My guess is that Yelp will seek to extend SeatMe into a range of SMB categories beyond restaurants.
Yelp could try and go head-to-head with OpenTable, which would be challenging. IAC/Urbanspoon at one time offered an online reservations system that sought to compete with OpenTable but failed (it could have been because of poor execution). SeatMe competes with lower fees and subscription vs. per-head pricing.
Whether or not Yelp challenges OpenTable directly the SeatMe tool can be generically sold to SMBs to enable online scheduling and appointments. SeatMe can also be embedded in Facebook Pages, which (if continued), would essentially represent the first product Yelp sold to SMBs beyond its own borders.
What do you think about the acquisition, the outlook for competition with OpenTable and the prospect of extending SeatMe beyond restaurants and bars into other SMB categories?