Google is taking one more step further into Yelp's territory after buying and shutting down Appetas, a startup company that helps restaurant owners build good-looking and fully-functional websites.
Founded in Seattle in 2012, Appetas was able to raise up to $120,000 in funding from Palo Alto Venture Science and Right Side Capital Management. Several other companies provide the same website-building service offered by the company, but Appetas specifically targets restaurants, with third-party apps such as GrubHub and OpenTable integrated into its platform. This allows small and medium restaurant owners to provide online services that are usually offered by large chains but not by them, such as reservations, delivery systems, mobile and social media integration.
"We are excited to announce that the Appetas team is joining Google," write co-founders Keller Smith and Curtis Fonger on the Appetas blog. "Google shares Appetas' vision for bringing incredibly simple experiences to merchants that strengthen their business. We're very excited to use what we've learned with Appetas to create something even better at Google."
The team also said that it will be contacting their existing customers to help them transition into other platforms before fully shutting down their service and making their way to Google.
Smith and Fonger will be working on "new endeavors," but exactly what those are neither Google nor Appetas has revealed. It seems Google is keen on enhancing its relationship with local businesses, starting with restaurants. Does this mean Yelp's restaurant reviewing business is in trouble? We have yet to see.
Back in 2011, Google acquired restaurant review aggregator app Zagat for $125 million but has failed to monetize its new property since then. With another dining app under its yolk, Google could be looking to use its latest assets to kick local business websites such as Yelp and Foursquare out of the picture.
One can only wait how Google will make most of its new acquisition. Either Google will integrate it with its portfolio of location-based offerings for people looking for the best gastronomic experience or whether it will be allowed to have third-party sites joining the local search party.
Analysts, however, believe that Yelp could prove it's tough to beat, even for Google, given Yelp's newly-forged partnership with Yellow Pages, the largest platform for local ads in the U.S. The deal, says Yellow Pages CEO David Krantz, will allow Yelp to provide local businesses access to 95% of the Internet market.
"We believe Yelp can expand its lead in local relative to competitors like Google and Facebook as mobile evolves as the main entry point to the Web," says JMP Securities analyst Ronald Josey. "And given Yelp reviews are now embedded in Yahoo's search results, we believe this should drive even more usage and ultimately content across multiple verticals."
