recently announced that it has entered into a partnership with
OpenTable Inc. (
, which will allow users to book a restaurant table over mobile
web. The company said that the app will be available to
approximately 20,000 OpenTable customers in North America.
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The partnership comes at an opportune time for Facebook as the
company continues to focus on driving customer engagement for its
mobile apps. On the other hand, the deal will help OpenTable to
counter growing competition from the likes of
in the online restaurant reservation industry.
Both Groupon and Yelp have consolidated their position in the
industry through acquisitions. While Groupon acquired free online
reservation start-up Savored in September last year, Yelp grabbed
SeatMe in July this year. OpenTable also tried to strengthen its
position by acquiring RezBook early this month.
Nevertheless, we believe that Facebook's massive user base will
boost OpenTable's clientele within a very short span of time. The
partnership will also help Facebook to attract new mobile users,
which is expected to boost advertising revenues.
Lately, mobile has become the primary focus of Facebook to
attract advertisers. To boost customer engagement in mobile,
Facebook launched Twitter-like hashtags (#), Facebook Home and
Instagram's video application.
These offerings have significantly improved its customer base as
monthly mobile active users (MAUs) jumped 51.0% from the year-ago
quarter to 819 million in the recently concluded second quarter.
More importantly, mobile ad revenues contributed 41% of total ad
revenues. We believe that this is a significant achievement for
Facebook within a very short span of time. Facebook did not
report any mobile revenues at the time of its IPO.
We believe that Facebook's massive mobile user base represents
tremendous growth potential. We also expect the company to
continue to pursue strategic acquisitions that will help it to
further monetize this huge user base.
Moreover, its upcoming products such as the Reader and
television-like spot offerings for advertisers (reportedly for
$2.5 million a day) are expected to drive top-line growth going
forward. Additionally, improving customer engagement will help it
to aggressively compete in the ad market.
Currently, Facebook has a Zacks Rank #2 (Buy).