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Last week, popular reviews site Yelp announced that it had teamed up with OpenTable to offer Yelp users the ability to book restaurant reservations through OpenTable directly on the Yelp site.

A Yelp-OpenTable relationship is one that some have speculated about for some time now, and given that 29% of the businesses reviewed on Yelp are restaurants, the integration between the two services seems like a no-brainer.

According to TechCrunch, Yelp's integration with OpenTable comes as part of OpenTable's affiliate program. That's an important point, as Yelp has had a somewhat difficult time translating the massive popularity of user reviews into massive profit. A big reason for that: as I've pointed out before, it's tough to provide an open forum for individuals to voice their opinions about businesses while at the same time trying to build commercial relationships with those very same businesses.

Recently, Yelp has been the target of class action lawsuits alleging that Yelp has tried to 'extort' business owners into purchasing advertising. With this as a backdrop, becoming an OpenTable affiliate seems like it might be a less troublesome way to monetize without trying to deal with restaurant owners directly. That said, the relationship with OpenTable raises a couple of interesting issues:

  • As an OpenTable affiliate, Yelp has a clear financial stake in encouraging its users to book reservations through OpenTable. Logically, Yelp users are going to be less inclined to book with restaurants that have negative reviews and while I'm certainly not suggesting that Yelp will censor out negative reviews left for restaurants that work with OpenTable, it seems that Yelp's critics could raise the question of potential conflict.
  • It is not clear whether restaurants working with OpenTable are informed that a reservation was made through Yelp. If this is the case or ever becomes the case, some OpenTable restaurants would ostensibly have an advantage over non-OpenTable restaurants in that they could go well beyond the call of duty in serving Yelp users in order to promote positive reviews and avoid bad ones. Obviously, that might be a smart move for the restaurant but it would potentially result in reviews on Yelp that are not representative of the typical dining experience.

Needless to say, potential and perceived conflicts (and hypotheticals) don't necessarily translate into real-world problems and personally, I think the Yelp-OpenTable relationship is a sensible one. But the broader battle between generating revenue and maintaining credibility is always going to be a tough one for user reviews sites like Yelp. There's a fine line to walk, and given the affiliate relationship, Yelp and OpenTable would be wise to avoid too much PDA when dining in public.

Photo credit: madmolecule via Flickr.

Patricio Robles

Published 7 June, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)

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This really is a match made in heaven, but I can certainly see where there are going to be some issues. Thanks for sharing about the connection, we'll have to wait and see how this one plays out.

about 6 years ago

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I'm surprised to see such disdain regarding Yelp. A 'large enough' sample size is typically that over 30, so one should be able to trust those that have an ample number of positive reviews. (Whether or not restaurants are padding their own reviews is a moot point. There are always going to be some bad apples that contribute to a hopefully small margin of error. Let's not be that naive that there is some Utopian rating site. It will never exist.)

I think that the integration of Yelp and OpenTable make totally perfect sense. I have found myself toggling between the two sites to make reservations. I think that Yelp is better known (and pops up more often on Google, for example) than OpenTable. What an amazing opportunity for OpenTable and in the long term for Yelp as well, since it differentiates them from other rating sites like Zagat (ok, already differentiated b/c you have to pay to see the reviews) and CitySearch, Chowhound, etc. I realize that UrbanSpoon has a reservation system, but overall I think that the business with the strongest brand identity in this space is OpenTable. I love this idea and hope that both the business and the consumers reap the benefits of a very logical integration plan.

about 6 years ago

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