Facebook, working harder every day to improve their mobile offering after the mildly lethargic response to their branded Facebook phone, is now challenging Yelp for a piece of the restaurant reservation business. In a partnership with OpenTable, this new enhancement to the mobile Facebook experience actually moves it into the useful category from the time wasting category.
While many people searching for restaurants use Yelp, Google or OpenTable directly, Facebook is looking to compete with these services. The opportunity for Facebook here is to blend the social aspect seamlessly with the functional aspect without making it cumbersome. As folks are already using Facebook mobile in droves, attaching something functional to it will immediately pull market share away from the aforementioned services.
Currently Facebook is number two when it comes to local business search on mobile. The key here is going to be taking advantage of other mobile features such as geo-location and social to enhance their search functionality and engagement. Facebook is also adding movie and TV showtimes to the application as well. Another market that can wrap many services into one.
The other important aspect of this is that advertisers spend a lot putting their ads on business search pages. Yelp is peppered with advertisements, which makes their service viable and profitable and still free. Facebook would be wise to tailor design of the application and partner with local businesses for advertising. Clearly Facebook has the user base to start offering functional aspects of their mobile application, they just have to make sure they get engagement right.