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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

October 26, 2009 at 10:00 AM

Urbanspoon shaking it up, entering reservation business

Something big is shaking at Urbanspoon, the Seattle company behind a hugely successful iPhone restaurant-finding application.

The company is launching a reservation service called “Rez” that adds a new dimension to its eponymous app and Web service.

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On an iPhone with Urbanspoon, you shake the device to spin dials that display and sort nearby restaurants. Rez adds a yellow button that pulses if one has reservations available. You can use the button to focus a search for restaurants with reservations available, and reserve with a few more taps.

Rez is more than just a new feature.

It’s pulling Urbanspoon into the business-software market and challenging the dominant online reservation company, San Francisco-based Open Table, which had sales of $55.8 million last year.

Rez is being tested in Seattle but it plans to expand to other markets, drawing on the reach of media giant IAC, which bought Urbanspoon in February.

The grand plan is to extend Rez with Citysearch, IAC’s national entertainment directory, and use its sales force to bring Rez to new markets.

Urbanspoon co-founder Ethan Lowry believes the company has a chance because Rez is so easy and inexpensive to use for restaurants.

Plus it’s a useful addition to the Urbanspoon app, which has been downloaded 7 million times and showcased by Apple.

If they get enough restaurants to supply reservation data, that is.

Restaurants use a special app that they tap and slide to notify Urbanspoon when tables are full or open. They can also use the system to add online reservations to their Web site, as Ray’s Boathouse has done.

This can all be done on an iPhone or iPod Touch, or through a browser.

Urbanspoon has given iPods to restaurants testing Rez, including Dahlia Lounge, Rover’s, Canlis, La Spiga and Matt’s in the Market.

Starting this week, Rez will be used by the 30 restaurants participating in November’s Dine Around Seattle dining program.

Eventually Urbanspoon plans to charge a commission on seats filled, similar to Open Table but at a lower price.

“The key differentiation is going to be, ‘It costs you nothing when we send you business,’ ” Lowry (below right) said. “Our goal is to be so outrageously cheap no restaurant would say no.”

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Rez is being used mostly by high-end restaurants now, but the Urbanspoon team thinks it will help even small restaurants get more exposure and seats filled.

“The best way to look at this is as a new advertising mechanism,” Lowry said. “Instead of saying, ‘Come to our restaurant,’ we’re saying, ‘Come to our restaurant at seven with a party of four.’ ”

Urbanspoon hopes to add Rez to other Web sites, including newspaper sites.

It’s just a question of finding enough time at a five-person company to do it all.

They recently moved into an office with an amazing view — in a Northlake marina on Lake Union — and they know before most anyone when a great table opens up.

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Comments | More in | Topics: app, Apple, iphone

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