Google Picks Up Appetas
Google may have scarfed up Appetas more for its talent than for its tech, but it's an indication of the company's interest in ramping up local business activity. Yelp has made a name for itself for its restaurant and other reviews, but it has weaknesses that could make it vulnerable to competition from Google, suggested financial analyst Trip Chowdhry. "Yelp is a company with poor fundamentals."
May 12, 2014 11:01 AM PT
Google last week acquired restaurant website builder Appetas, a move that could strengthen its relationships with small businesses and ratchet up competition with Yelp, which currently dominates the restaurant review scene.
Appetas helps restaurants increase their online presence by building out professional websites that can be integrated with locally focused services such as GrubHub, OpenTable and Foursquare.
In announcing the acquisition, Appetas noted that the two companies had similar goals for simplifying life for business owners, and that Appetas was looking forward to creating something "even better" at Google.
For now, though, the Appetas service will be shutting down so the team can focus on "new endeavors." The company promised to help existing customers transition to other platforms going forward.
Talent Now, Better Product Later
It's possible that this is currently an acquisition that's more about talent than about repurposing Appetas' current offerings under the Google umbrella, said Gordon Owens, digital marketing professional at GO Digital WSI.
"I ... can't imagine an easy website creator with a few basic integrations being something Google needed to buy versus build themselves," he told the E-Commerce Times.
However, the acquisition could fuel Google's ambitions to become a bigger presence in local businesses and markets -- an area where there's plenty of room for improvement, said Owens.
"Google has made life difficult for local business with the Google+ Local verification on top of a previously verified Google Places listing, and now they are downsizing Google+ -- so who knows what new hoops local business will need to jump through to show up on local search?" he wondered.
Getting In With the Restaurant Crowd
If Google wants to make inroads into local markets, securing a spot in the restaurant world is the way to go, said Owens.
"Restaurants are great candidates for local pay-per-click campaigns, especially on mobile," he noted. "It could be that Google wants to have a more complete ecosystem for local businesses to help drive ad revenue. Many restaurant clients see great success with targeted pay-per-click campaigns served to mobile searchers, and pay pennies on the dollar versus desktop. Mobile users are also more likely to buy from restaurant search results, so it is a win-win."
Yelp may be the dominant name in that mobile restaurant space right now, but a quality product from Google has the potential to become a leader, said Trip Chowdhry, senior analyst for Global Equities Research.
"Yelp is a company with poor fundamentals," he told the E-Commerce Times. "They're relying totally on advertising, and some of the merchants are becoming displeased with it. They've created a good name for themselves in the space, and it was a good way to get into mobile platforms, but they're not the all-powerful company that some people think they are. The right company and name could do a lot in that area."