OpenTable issued a preliminary prospectus for a $40 million IPO (initial public offering) on January 30, 2009. OpenTable offers a free online restaurant-reservation service for consumers at OpenTable.com, and offers restaurants an online reservation booking system. OpenTable CEO Jeff Jordan was previously a top executive at eBay, heading its North America marketplaces business from 2000 through 2004 and heading PayPal from 2004 until his resignation in 2006.

Jordan told AuctionBytes last month that the OpenTable model uses a network effect, the same phenomenon that led to eBay's success. "The belief is that we will continue to attract more diners by attracting more restaurants, and we'll attract more restaurants by having more diners," Jordan said.

Restaurants pay OpenTable an installation fee for the system, called Electronic Reservation Book (ERB) as well as a monthly subscription fee and a fee for each restaurant guest seated through online reservations. The company was formed in October 1998 by Chuck Templeton and was originally incorporated as easyeats.com, inc.

OpenTable revenues grew from $16.7 million in 2005 to $27.2 million in 2006 to $41.1 million in 2007, representing a compound annual growth rate of 57%. However, it warned of the effect of recession on consumer discretionary spending. According to the prospectus, the total number of reservations decreased 10% - 15% for the fourth quarter of 2008 from the same period in 2007.

The OpenTable network includes approximately 10,000 OpenTable restaurant customers spanning all 50 states as well as select markets outside of the United States. During the nine months ended September 30, 2008, OpenTable seated an average of approximately 2.8 million diners per month. As of December 31, 2008, the company had 297 full-time employees including 106 in operations and support, 74 in sales and marketing, 67 in technology and 50 in general and administrative functions. It also had five contractors who are full-time equivalents, including three in operations and support and two in general and administrative functions.

Link to prospectus