Grubhub Bites at Yelp’s Offer of Eat24

August 8, 2017         By: Steven Anderson

We recently heard about a new move between Groupon and Grubhub, but as it turns out, that wasn’t the last expansionary effort the company had in mind. New reports suggest that Grubhub is now buying a chunk of Yelp, specifically, the Eat24 chunk.

Grubhub’s picking up a fairly hefty tab to land Eat24 on its own plate, shelling out fully $287.5 million in a straight cash purchase. It was a move that gave Yelp some fresh new market credibility, as Yelp’s stock price saw an 18 percent jump not long after the measure.

Plus, Yelp noted that this was actually the start of a complete, long-term partnership that would allow it to integrate ordering capability from Grubhub directly into Yelp. Oddly enough, Grubhub’s purchase of Eat24 cost it a bit of ground in the market, despite word of substantially increased revenue for the second quarter of 2017.

While Yelp itself has something of an image problem these days, something like this might be a help. The recent South Park episode “You’re Not Yelping” didn’t really help here, especially when a musical number displaying what happens to Yelpers at restaurants who announce their presence a bit too loudly was involved. Seriously, don’t watch “The Yelper’s Special” before you’re about to eat. But do watch it in general so you know why you’re not telling people you plan to post a Yelp review.

But by getting away from the notion of pretentious gasbags suddenly convinced they’re food critics and getting back toward the idea of helping people find exciting new places to have dinner, it could be a real help for Yelp in general, and probably for Grubhub too. I know I’ve used Yelp on several occasions to go looking for places to eat I’ve never heard of, and found some noteworthy new stops as a result.

The more functional Yelp can make its operations, the better off it will be. By getting together with Grubhub, it’s increased the chances of people finding and trying these new places to eat. Incorporating mobile order ahead and mobile payments options, meanwhile, might be the next route to go, but that might be more for the individual restaurants to set up on their own.