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Investing

Google’s Buy of Zagat May Target OpenTable (GOOG, IACI, OPEN)

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By Jon C. Ogg Updated Published

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OpenTable, Inc. (NASDAQ: OPEN) is coming under more fire.  The stock had already sold off significantly since May, but the news that Google Inc. (NASDAQ: GOOG) is buying Zagat is a direct target at its market.  Zagat rates many restaurants and this will allow Google to get even deeper into OpenTable’s market if it wants to.

The threat is not an immediate reservation service threat, but having that embedded Google backing would simply be a service on top of search.  The announcement from Zagat’s management is here.

It was just late in August that UrbanSpoon signed a deal with Zagat that will display over 25,000 Zagat reviews featured prominently on Urbanspoon.  IAC/InterActiveCorp. (NASDAQ: IACI) owns UrbanSpoon.

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OpenTable shares are down 6.6% at $58.55, but the stock is now down 50% from its highs and is still carrying a high premium valuation even if the 52-week range is $54.42 to $118.66.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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