OpenTable, the online restaurant reservation service, has filed an S1 with the SEC to raise $40 million. The company, founded in 1998 by former Citysearch President Thomas Layton, was launched as Easyseats.com. It currently has contracts with 10,000 restaurants in all 50 states, or approximately one-third of U.S. reservation restaurants. It seats roughly 2.8 million diners per month.

Among OpenTable’s features are computerized reservation management, table management, guest recognition and e-mail marketing for restaurants. In return, it charges installation fees, subscription fees and incremental fees per booked diner. It made $41.3 million for the nine months ended Sept. 30, earning a small profit. This comprises $22.16 million from subscriptions, $17.34 million from reservations, and $1.81 million from installations and related services.

The 292-person company currently handles reservations in the U.S., Canada and Mexico, and also has launched operations in Germany, Japan and the U.K. Its international operations outside North America account for 900 restaurants.

While the company shows rapid growth in most segments, it experienced setbacks last year in France and Spain, where it closed offices. Moreover, the depressed worldwide economy may have played a large role in a falloff in reservations, which declined in 4Q 2008 anywhere from 10 percent to 15 percent.

Gary Campbell is among the directory publishing executives with the most experience in building a performance-based ad model in the print product. He is now hoping to leverage that experience in a new venture called Cost Per Call Solutions.

The new company was founded with colleagues from the recently disbanded Canwest Directories operation. CPC Solutions will offer traditional media players a team of sales reps who will take a cost-per-call package to advertiser at the tail end of a sales canvass in order to close non-advertisers, existing accounts that failed to renew and others that might be more receptive to PPC than a traditional subscription model.

Campbell’s former venture, Canwest Directories, a performance-based print and online directory business with titles in Ottawa, Ontario, and Regina and Saskatoon, Saskatchewan, was shut down late last year by parent company Canwest.

In a recent telephone conversation, Campbell argued that the shutdown had a lot more to do with the condition of Canwest than the soundness of the directory unit’s operations. Winnipeg-based Canwest is facing serious financial challenges and is at risk of violating debt covenants.

Campbell believes strongly that in less turbulent times, his business would have been given more time to develop, or at least a more aggressive effort would have been made to find a buyer. However, in this media environment Canwest Directories didn’t have the luxury of time. It probably had to produce a monster success in order to have a chance of surviving the current turmoil.

“Canwest’s decision had more to do with the head office than with the [directory] business,” Campbell said.

Despite the demise of Canwest Directories, Campbell believes the lessons learned from two years of selling on a pay-per-call model will be valuable to clients of his new venture. Canwest Directories produced two editions of its pay-per-call book in Ottawa and one each in Regina and Saskatoon. The experience servicing 2,500 pay-per-call advertisers (plus other smaller accounts that bought on a more traditional subscription model) has taught Campbell and his partners a thing or two about which categories, ad sizes and sales approaches work, and do not work, in selling pay-per-call.

One of the core ideas of the new venture is that it makes sense to have a self-contained pay-per-call sales force.

“One of our findings was that once a sales rep has sold this way [pay-per-call] it is difficult for them to sell any other way,” Campbell says.

By bringing in an outside force like his, Campbell contends, publishers can use pay-per-call with minimal risk.

“They do not need to disrupt existing operations,” he says.

Campbell’s new venture certainly is well timed. While implementation is still a work in progress, more and more publishers are pushing aggressively into pay-per-call in print. One question Campbell faces is the degree to which publishers will want to bring in an outside sales team or will choose to fully integrate PPC into their operations. In either scenario, there is a need for expertise is designing and implementing new ways of selling directional media advertising.

Expanding on the bit about text messaging in my previous post, a panel discussion at i2G likewise expanded on the topic.

The idea is that despite its lack of sex appeal (compared with other things happening in the mobile world), SMS is where the action is today. Less than 20 percent of mobile users have smartphones, according to TKG data, meaning the vast majority of mobile users are primarily talking and texting.

It’s more the latter, according to Nielsen, which reports that the average mobile user sends 357 texts per month compared with 204 calls. This is a surprising figure to many, and it’s clear that younger users are skewing the average.

“If you’re 25 or younger, it’s the language that you speak,” said Greg Hallinan, VP of marketing for Verve Wireless. This is a point that’s been echoed before. But another segment to which SMS can appeal is small businesses, added Hallinan. Its simplicity lowers the barriers to entry for resource constrained SMBs.

“Their threshold for sophistication is lower and they’re used to direct response [advertising] in print,” he said. “They don’t have mobile Web sites but they do have promotions and a need to get people in the door in a time sensitive way. That can be done easily in SMS in 160 characters or less.”

By time sensitive, Hallinan is referring to promotions that can be turned on and off with SMS campaigns that Verve and others like 4info provide. These can include two-for-one promotions at restaurants, event announcements at dance clubs, etc.

A campaign Verve ran for Boston Magazine for example involved a “brand name distiller” that sponsored a roving happy hour in different bars. Users who opted in received texts containing happy hour details, drink discounts and “front of the line privileges.” Texts were often sent to about 500 users, resulting in 30 percent response rates.

“That’s not a lot in a city like Boston but it was a hit record for these bars, a hit record for Boston Magazine and a hit record for the distiller who sold promotions into these bars,” said Hallinan. “We just provided the service to make it happen.”

Though a lot of potential lies in mobile search and application engagement, it will be contingent upon continued smart phone penetration. Until then, SMS can’t be discounted, as the current leading search input. It sure hasn’t been discounted by the VC community, with very recent funding rounds going to ChaCha ($30 million) and 4info ($20 million).

“It’s the gateway drug to mobile interaction,” said MoVoxx CEO Alec Andronikov.

________

Related: Verve Wireless President Tom Kenney will be a speaker at TKGs Marketplaces conference, March 16-18 in Los Angeles.

(The View From the 46th Floor)

The bad market for real estate has put a crimp in a lot of real estate marketing (except perhaps for foreclosure sites like Zetabids). The New York Times, on Sunday, found that many real estate sites were flat at best, with some laying off staff. In The Times’ article, Curbed founder Lockhart Steele referenced “the 401K effect,” with people losing interest as the value of their holdings declined.

But Zillow, a prime mover of the real estate Web site revolution when it launched its Zestimates of housing values in 2006, says it is riding the tide. Traffic-wise, Zillow reports that it is seeing record usage.

In December, internal reports and Omniture showed it had 5.8 million unique users, with many of them only using Zillow. For January, which typically gets much higher real estate traffic than December, the company is expecting to report 7 million uniques.

The boost in Zillow’s traffic would seem counter-intuitive, especially given the “401K” effect cited above (which I believe in). But during a visit to the company’s very corporate headquarters on the 46th floor of the Wells Fargo building in Seattle’s financial district (they got “a great deal” from the landlord), COO Spencer Rascoff said the site is benefitting from several factors.

These include improved search engine optimization, a rich database of listings on account of numerous brokerage deals (“We’re getting feeds from every major brokerage”), and the launch of the Zillow Advice product. The company’s mortgage marketplace also has a role.

“There is more interest in the category at every stage of real estate,” said Rascoff. Closer ties with the brokerages play an especially strong role.

One program still getting under way is the relationship with the Zillow Newspaper Consortium, which is providing Zillow with additional sales from hundreds of newspapers, while distributing its features. Zillow will also eventually receive newspaper real estate content, especially Open Houses.

The consortium service recently launched in major market dailies, including the San Francisco Chronicle, The Houston Chronicle and The Philadelphia Inquirer. Rascoff said it enters Phase 2 in “a couple of months.” But while Zillow will continue to develop the relationship, he candidly said it isn’t expected to play an especially big role for the company. “We’re a big media company as it is,” he said.

I’m at Opus Research’s one-day Internet2Go show in San Francisco where there have been lots of good case studies and concrete talk about mobile marketing. Lots of it is local, but there is a fair mix of agency and brand representation. Even in those cases, key components of the mobile campaign often come down to the lower points in the purchase funnel, which are most often local (i.e., auto dealer locator).

Blogging on the go, I’ll give one example: A company called HipCricket is adding mobile components to traditional media campaigns to make them more measurable. This is similar to work we’ve seen done by Google lately in print (now defunct) and radio. HipCricket has partly focused on the latter with SMS calls to action integrated with radio spots.

The Coffee Bean and Tea Leaf coffee chain, for instance, ran a campaign with L.A. radio station KISS FM to get users to text “bean” or “coffee” to a designated short code and receive half-off coupons for a coffee drink. The promotion ran for three months, received 6,000 unique entries, and added a more measurable component to the radio spot.

As a revenue model, the question is whether to treat this as a value-added feature to solidify ROI and drive or retain ad sales or to monetize these response rates in some way. The answer, according to HipCricket CMO Jeff Hasen, depends on what (when) you’re talking about.

“Pre-recession there was a push to use this to monetize additional [foot] traffic that could be tied to these campaign components,” he said. “Now it’s something that’s more being used to prove value in the campaign. Tying this to a radio campaign can give the campaign appeal that it didn’t have before.”

The other interesting thing about the campaign is that it’s purely SMS based — something that seems to get shrugged off in the general public eye in favor or sexier devices (read iPhone) and content delivery. But with smartphone penetration sub 20 percent, the more immediate and mass market opportunity lies with the more prevalent inputs: text and voice.

An equally interesting case study was given by NearbyNow’s Scott Dunlap, but since it was tied to a product announcement coming out next week, I’ll honor his request to keep a lid on it until then. We’ll also get to hear more from Dunlap at TKG’s Marketplaces conference coming up in March. Stay tuned.

IAC’s ServiceMagic,  a leader in delivering leads to services, has purchased Bethesda,MD- based Market Hardware, which provides websites and search engine optimization for 2,500 SMBs. Market Hardware, which has 30 people, targets “high online spend verticals” that closely mirror ServiceMagic’s base of 56,000 pre-screened professionals.

Market Hardware has relationships with 40 associations in the segments that it serves. It is also known for its “Vertical View” process of studying and launching new segments in six weeks or less.

The acquisition is the most recent of several for ServiceMagic, a 930 person company with an annual run-rate of $120 million. In the past several months, it also purchased ZipExpress, which partners with retailers to hire out installation jobs; and has expanded internationally via the acquisition of  Koening in the U.K. (including 123Devis.com and 123GetAQuote.co.uk) and Travaux.com in France.

ServiceMagic also recently invested in BuildProof. The company is described as “the PayPal for home improvement,” setting up escrows so contractors don’t run off in the middle of the night.

In a release announcing the deal, ServiceMagic noted that it is entirely logical for the company to expand its offerings with  MarketHardware. “Many top-rated home service professionals in the ServiceMagic-approved network don’t have a visible storefront. Having and maintaining a professional website gives them a chance to showcase their business online and the great home improvement work they are doing in the community,” said CEO Craig Smith.

Speaking at the ILM conference, Co-Founder Rodney Rice seemed to hint that a deal was in the works.  “We’re focused on broadening out our offering to service professionals,” said Rice.  “We won’t have a ‘one size fits all approach.’”

CEO Brian Kraff separately told The Kelsey Group that “the website is quickly becoming a focal point in all forms of marketing. It just simply makes sense for SM and MH to join together to bring a consultative, verticalized, full service approach to providing online marketing services.

“Our companies are a great cultural fit,” he continued. “Our team is looking forward to helping SM expand its offering. Their team is energetic, down-to-earth and operationally minded. They get a division that is a leader in the website space, and we get a parent company with 56,000 contractors who can make use of our competencies. Feels good.

At Kelsey’s recent ILM conference in Santa Clara, Kraff provided additional detail about his company, and it’s “vertical view” concept. The idea of vertical view is not to build a template, but to understand the segment so that Market Hardware could differentiate the business, he said. “The upper quartile of each segments especially needs to have a differentiated Web presence to stand out.”

Kraff also noted that Market Hardware is aimed at companies that are on their second or third websites and are ready to spend more on a “consultative approach.”  Market Hardware clients are especially spending more on high pay per call/per per click actions.

Buzz monitoring has gotten increased attention lately as something that partly falls under the category of online reputation management. BuzzGain is a new company that targets individuals or SMBs with the ability to track this buzz — i.e., where the conversation is happening around their brand.

The idea is that you listen to where conversations are happening before you make the decision of where to position your marketing. In blogs and social networks, there are “influencers” and those through which a message is passed more effectively. This is part of the idea behind Charlene Li’s “personal CPM” — where individual consumers are valued in a way that is conceptually similar to Google’s Page Rank.

This was a big theme at the OMMA Social conference I attended earlier this week, where the one liner was: “Advertise through your users not to your users.” This is a message that at its core contains the word-of-mouth factor, which isn’t anything new in the SMB realm, and continues to be the biggest driver (or inhibitor) of new business.

The question is, how do you harness that effectively in online advertising — especially at the local level? Taking part in Yelp’s SMB tools is one way, and others like MerchantCircle have similar features. BuzzGain appears to be attempting a more sophisticated and all-in-one way to do this, with the tag line “do-it-yourself PR.”

Buzzlogic has been doing this for years, but mostly for larger companies. It was first a tool for PR people to track where conversations were happening around their clients; then it evolved to other things such as SEM keyword research and influence targeting. BuzzGain seems to be positioned and priced ($99-$999/month) as a sort of Buzzlogic “lite” for smaller-scale businesses (characterized by TechCrunch as targeting SMBs).

It’s a great idea for any business to listen to the conversations and act accordingly. But whether SMBs will do it is the real question. We know SMBs to be famously averse to self-service online advertising: About half have a Web site, and far fewer initiate and manage PPC campaigns.

Buzz monitoring is the next level of sophistication, and an evolutionary step for many SMBs. The savvy ones will get it, but they’re unfortunately a very small segment, relative to the whole. Mid-market businesses with dedicated (and savvy) marketing managers could, however, eat it up.

For SMBs, it seems to be a tool that is more likely to be adopted and bundled by the many publishers and SEM firms that manage and fulfill online campaigns on their behalf. That’s where the action is taking place at this level. To be fair BuzzGain also markets to PR and marketing firms as a tool to help them to be more effective for their clients.

As goes with any start-up arming smaller businesses with tools to be more effective, we’re supportive of it to work, and to scale.

The iPhone app store now has 15,000 apps available. So what’s No. 8 (among the free utilities)? RepairPal, an auto site that uses the GPS capabilities of the iPhone to deliver repair auto estimates, a comprehensive repair shop directory and a roadside assistance feature. RepairPal ranks behind such iPhone apps as Sound Grenade, WiFi Checker, myLite Flashlight and iStethoscope.

The app has been downloaded 25,000 times and was voted a “staff favorite” by Apple.  CEO David Sturtz, a former hedge fund analyst, says the site began development a year-and-half ago, initially building a database with the assistance of 26 mechanics and parts specialists. The initial group continues to consult for the site’s network, supplemented by six full-time specialists.

“We’re two inches wide and 20 miles deep,” says Sturtz, adding that similar repair projects, one by a prominent car portal, ended up as major failures. “We’ve created everything ourselves,” he notes.

“Our veteran technicians have identified typical problems that occur on each make/model by system,” add Sturtz. “You can alleviate some of the diagnostic risk you confront at the mechanic. We also have an extensive encyclopedia with articles written for people like my mother.”

RepairPal launched last year at around the same time as DriverSide, which was started by former Stepup exec Jan Dunning. That site is more broadly oriented than repair, “designed around the car you drive, with tools that make it easy to buy, own, and sell your car.”

Our Marketplaces 2009 conference in L.A. is just around the corner (March 16-18). Some great additions have just been announced: Active Network CEO Dave Alberga (our fourth keynote); Yahoo Local leader Atif Rafiq; and all the ins and outs of vertical local mobile services in a Day 3 SuperForum.

The SuperForum has a lot of highlights in and of itself, including Dinesh Moorjani, who runs mobile for IAC; Sharon Knitter, Cars.com; Walt Doyle, Where.com; Tom Kenney, Verve Wireless; Scott Dunlap, NearbyNow; Craig Hagopian, V-Enable; Nick Gee, Mobile People; and Lee Gientke, Orange Soda.

We’re also working with BIA Digital Partners Principal Gregg Johnson on a very special pre-conference session that will spell out all the best strategies for financing interactive companies in this environment – timely, no? Gregg’s the best at that.

We usually see everyone who is serious about the local and vertical space at our events. Will we see you, too? Sign up here.

Video creation platform provider Mixpo today announced partnerships with five local media organizations: NBC Local Media, Tribune, Freedom Communications, TownNews.com and Fisher Communications.

The deal will equip each new partner with Mixpo’s VideoAd platform, which will let advertisers create and distribute video ads into the publishers’ existing online advertising systems. For the publishers it provides an enticement for new and existing advertisers, given the lowered barriers of video creation that has driven awareness and demand among SMBs. Ultimately, the idea is to better monetize publisher display inventory with video ad units.

For Mixpo, it’s an additional sales channel through which to push its platform into the SMB marketplace. It’s also additional distribution. There are lots of video production vendors targeting the local/SMB space and. They’ve each differentiated themselves by feature sets, and more importantly distribution (YouTube alone isn’t enough).

For the former, Mixpo has lots of great analytics and customizable calls to action that can be embedded directly within videos. But with respect to distribution, it continues to form deals like this that provide locally targeted online inventory where these videos can “live.” Importantly, these deals also come with a sales channel to push the product into the fragmented SMB market.

In addition to this deal, it’s signed channel partnerships with SiliconValleyOnline, KGO Radio and real estate social network ActiveRain, to name a few. This also follows a clear pattern of channel deals from the handful of leading video production vendors in this space (most recently, SpotMixer’s deal with Google). This is the name of the game, and will be the biggest survival factor for these companies.

Mixpo is positioned fairly well so far in this respect. The company was founded in 2005, and has raised $6.5 million in venture financing from the Madrona Venture Group, the Working Opportunity Fund, Yaletown Venture Partners, SpringBank TechVentures and private investors.