Will “Groupon Reserve” Save Groupon Inc (GRPN) or Open Doors for Others?

Facebook or OpenBook?

Facebook Inc (NASDAQ:FB) has a lot new products and ideas which include Facebook Home, Instagram Video, and new partnerships. However, the scrutiny on the company has also grown since its IPO over how to better monetize its 1.1 billion active monthly users. Despite showing significant mobile growth in a year’s time, going from 0% in 2012 to now a full 30% of revenues coming through mobile systems, people are still waiting for Facebook Inc (NASDAQ:FB)’s next big idea.

Restaurant reservations could be the perfect fit for Facebook. While Facebook Inc (NASDAQ:FB) did see total sales increase by 38% in its most recent quarter to $1.46 billion with $1.25 billion of that being advertising revenue, its average revenue per user dropped from $3.30 to $2.85 within the US and Canada segment. Unlike hardware or other high cost-of-entry innovations, restaurant reservations could be easily added through the company’s current business model. Food is something its users already discuss through posts and food pictures on Instagram, and adding something similar to an OpenTable would compliment real consumer needs.

OpenTable did a survey in 2011 where the average check per diner was $42.50. If Facebook can attract just a small percentage of its massive user base to just a few restaurants a year, this could skyrocket current revenues.

Final thoughts

Groupon Inc (NASDAQ:GRPN) Reserve might be a great idea but it may be too late for Groupon due to its branding problems and the fact that it is very similar to OpenTable’s business.  Even worse, bigger Internet companies like Facebook could potentially use their money and userbase to move into the business and take a huge chunk of the pie. This is because as more and more people create multiple Facebook accounts, revenues and net income – not user growth – will soon be the only data that matters. To make that data more appealing, restaurant reservations might be something for Facebook to consider adding to its menu.

The article Will “Groupon Reserve” Save Groupon or Open Doors for Others? originally appeared on Fool.com and is written by Michael Carter.

Michael Carter has no position in any stocks mentioned. The Motley Fool recommends Facebook and OpenTable. The Motley Fool owns shares of Facebook. Michael is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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