Last week, online city-guide service Yelp (YELP) took a direct shot at OpenTable (OPEN) by unveiling a tool that allows browsers to book a reservation at a Yelp-listed restaurant directly from that Yelp listing. It’s really a no-brainer; any app that draws more users or gets business owners more involved with their listing is a good thing for Yelp.
However, the fact of the matter is that restaurant reservations are yet another online arena Google (GOOG) can dominate if and when it decides to. And, as some astute GOOG owners already know, the search giant quietly sneaked into the arena a week ago via the acquisition of restaurant-website builder and host, Appetas.
Google Has Made Waves Before
As an example of just how disruptive GOOG can be to companies that have worked diligently to be the first to develop in industry, one only has to look at the card Google played in early April when it waded waist-deep into the online-travel booking game.
Through the acquiring of Room 77, Google garnered the ability to let travelers book hotel rooms directly from a map on a mobile screen. The Room 77 platform displaces companies like TripAdvisor (TRIP) and Priceline (PCLN), which had enjoyed Google’s willingness to connect their services and consumers. With Room 77 under its umbrella, GOOG gets closer to consumers.
And what would it take for Google to repurpose its Room 77 platform to become a restaurant reservation tool? Probably not much. And once it did –– allowing reservations to be made right from a map screen the same way it can book a hotel from a map — it could be a major setback for Yelp’s latest acquisition. And, with GOOG snagging Appetas, it’s not exactly a secret that the search company is keenly interested in the restaurant business.
It all raises the question … what other areas online could Google end up dominating if it decided to pull the trigger? Four immediately come to mind.
#1 — Online Dating
Last year, revenue at the No. 1 online dating site Match.com reached $788 million for parent company IAC/InterActive (IACI). That’s not much for a company the size of Google. But, the online dating industry is still very fragmented, with Match.com only responsible for about one-fifth the industry’s total annual global sales. If a smart company like Google can consolidate some of those pieces, it may be a slice of revenue pie bug enough worth targeting.
#2 — Web Hosting
While GOOG may a dominant name in web search, it has suspiciously stayed away from website hosting. That may be because the business is a giant pain. Thousands of sites open and close on a daily basis, and many of their owners are only interested in paying the bare minimum for the service … around $5 per month (sometimes less), on the low end. It may just be more trouble than it’s worth. On the flipside, if Google were willing to unveil an automated, self-service tool like most hosting companies offer, Google could be a major player in what’s estimated to be a $95 billion market by 2015.
#3 — E-tailing
Just for the sake of clarity, Google is already in the e-commerce game, serving up ads for client companies that sell goods, and collecting a few pennies for the effort with each click. It’s clearly not an e-commerce name in the same sense that eBay (EBAY) and Amazon (AMZN) are, however. Perhaps the handling of physical goods is an area GOOG doesn’t to venture into. Maybe, or maybe not. The company is getting its hands dirtier than most investors may recognize, with things like driverless cars, fiber optic communications (see below), and contact lenses that measure diabetics’ glucose levels. An online store would be comparatively easy to launch.
#4 — Digital Communication
OK, it’s not an online arena per se, but GOOG knows a thing or two about the importance of controlling the medium. Though Google Fiber is only available in Provo, Kansas City, and Austin right now, the company has shown a willingness to put boots on the ground and lay down infrastructure. Consumers love the ultra-high speed connections, and it positions the company to be the first legitimate threat to the nation’s monopolistic cable television service providers.
One Thing GOOG Needs to Keep in Mind
While Google has proven it knows how to penetrate existing markets where it doesn’t have a foothold, the company has also proven that its name can’t always provide needed leverage. Case in point? Google Plus. While it may be a computer-coding masterpiece, as a social networking destination, users have remained remarkably disinterested.
Perhaps part of the limited appeal of Google Plus is the sheer look; it’s visually bland, as most Google app pages are. Or, perhaps users simply don’t see Google as capable of providing entertainment, merely viewing the company as a utilitarian provider of web-based tools. Whatever the case, entry into new areas may be much easier for Google if it opts to not use the Google moniker; “Google Love” simply won’t attract an online-dating crowd.
But if the company is willing to get creative and build a brand from scratch, there aren’t too many online arenas that could fend off its domination.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
