English: This is actually Tom's Restaurant, NY...

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Every time an internet company files for their IPO, we learn a little more about the underlying economics of the transforming media landscape.

The themes of successful companies are consistent, particularly in the consumer space:  Platforms matter; achieving scale and reducing friction drive profit; and consumers are willing to try new things.

Take ordering take-out.

GrubHub was founded on the premise that consumers would be as comfortable placing a take-out order online as on the phone.

Turns out they were right.

After merging with Aramark’s Seamless platform late last year, GrubHub illustrates the power of achieving a leadership position with a scale platform.

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The company claimed 3.4 million diners were actively using its service at the end of 2013, placing more than 135,000 orders a day.

That translates into $137 million of revenue and an ebitda margin of better than 28%.

GrubHub is confident of its growth potential too: it currently serves 28,800 restaurants out of what it defines as a target market of 350,000.

GrubHub’s transaction model, whereby it takes a cut of the restaurant’s take, ultimately displaces a segment of the local advertising market.  As take-out orders increase through GrubHub’s platform, an establishment can rethink its local marketing strategy.

With each restaurant relationship, GrubHub increases the network effect of its service.  As a result, restaurants stay and consumers stay.  This is the same dynamic that has contributed to OpenTable’s success.

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