Why Yahoo’s hunger for relevance has led it to OpenTable

Food businesses have been a bright spot in the still-scary economy.
Food businesses have been a bright spot in the still-scary economy.
Image: AP Photo / Steve Senne
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No one was too surprised when Google bought Zagat last year. The marriage of the brands, against more pre-vetting searches, seems to yield upmarket but egalitarian results—a boon for diners and advertisers. Zagat might even be called the “artisan Google.” Now, Yahoo appears to be following the model, with today’s news it is eyeing reservation site OpenTable for acquisition. Is this just copycat empire building or does it have more grounded business sense attached?

Yahoo has suffered for a long time.  Sure, it got in early, had snappy slogans and commercials, captured the imagination of a new generation. Then it lost it all—or most of it—to a competitor that became an actual verb.  Nobody Yahoos.

So the news that Yahoo the company will be owning and offering a site—that not only helps people book a table almost anywhere or order food to be delivered to home, office, or trailer, but also has a really good reputation with small businesses—sounds like the best news Yahoo has been able to muster in a long time. OpenTable shares surged 6% in Nasdaq trading to close at $46.36 today. And Yahoo’s third-quarter earnings were stronger than expected, leading to its stock also rising in afterhours trading.

In this post-recession, still-bumping-along economy, small food businesses, from trucks to shops, cafes, bistros, and even in some cities, high-end restaurants, have clearly been a bright spot in an otherwise confusing and scary time.  New York and San Francisco, Chicago and Washington, DC, even Atlanta, are bursting with new, really good restaurants opened and run by smart, talented young people who see this career as a much faster way to pay off those student loans than a painful slot on Wall Street or an accessible rung on a corporate ladder. Everyone has to eat.  Nobody adapts like restaurant folks.  Casual is easier to do and more good food is being grown nearby, sometimes even on the roof, than ever before.  Sites like OpenTable have succeeded where Yahoo has failed—personalizing an experience for both business and customer, so a restaurant might know if a diner has an allergy or prefers paper napkins to cloth. It’s fun, relevant, and profitable. (Furthering the union of food and tech, Google has also said that mobile searches spike during mealtimes.)

That seems like that’s just what Yahoo’s going for.  Fun, relevant, profitable, and actually useful on a fairly regular basis, in a vibrant sector that is of clear value to both ends of the transaction.  It’s just where they ought to be wanting to go.

Now, if they can just fix the rest of that dated, lower middle-brow mess they call a site.