As somebody that worked for a competitor and knows a lot about both of these companies, I can't say for certain what company is going to "win" local services but I can promise you both of these companies will lose (or I guess you could say Angie's List has now already lost).
Angie's List went from a membership based review service and tried to unsuccessfully turn it into a marketplace which never worked. In the process they didn't invest in their most valuable asset which was high quality reviews of service pros and a lot of consumer trust. Maybe they are still the best right now for reviews, but that is going to change very soon and this acquisition will just accelerate that.
HomeAdvisor is just a sales and marketing company (which has been around since 1999 as its old name, ServiceMagic). They aren't a technology company. They have huge teams of sales people calling pros and selling them on buying consumer leads. Consumers fill in their information for a job and their system just matches them with the pre-sold leads from their sales team. The experience is poor from the consumer side (you often get matched with terrible pros who aren't interested in your job) and is even worse from the pro side (they are paying to be matched for a job they don't want). Pros hate it, they churn at huge rates, which is why HA needs a big sales team. It's a business and they make money but it isn't the type of business that can grow very big.
I'm not even sure why this transaction is interesting. Angie's List has been trying to sell themselves for a long time and has gotten to the point where their stock dropped enough that this deal today is "good" that was bad a year ago. HomeAdvisor has been around for 18 years and will go the way of the Yellow Pages in 3-5 years. Just rearranging the deck chairs on the Titanic.
Have to agree with this assessment, just recently tried both of those services in the hunt for a plumber. Everyone I called from HomeAdvisor didn't return my calls or else called to tell me they weren't actually plumbers. Angie's List was a laughable disappointment with only one search result for my entire zip code and a testament to how the pay-walled garden approach just doesn't work.
I finally resorted to asking around in my neighborhood and found a good plumber who was not listed on Google maps or any other online source. Reasoning was obvious: one bad review and your business is shot down forever, the best thing to do is to stay off the radar.
I have some of the same sentiment and concerns (my previous comment https://news.ycombinator.com/item?id=14242737), mainly around their lack of real technology, differentiated product, and questionable financials. Appreciate your insider knowledge (since you were the original CTO of Thumbtack).
Angie's List used to be awesome. When we bought our current house, we needed an array of professionals for various services, and we hired all of them via Angie's List reviews. Every single one was great. We have found that having a large number of relevant positive reviews on Angie's List to be an extremely strong indicator that the pro will do good work.
However, over the past few years, it really seems like it has stagnated, and it's clear they've changed their focus. It's harder to find people who have many recent reviews, and they're always trying to push "coupons" in your face.
These days more often than not, I get recommendations from our neighborhood Facebook group (sometime Nextdoor as well, but Facebook is much more active here). The track record isn't quite as good as Angie's List was in the glory days, but it's a lot better than Yelp or just randomly searching.
Hiring service pros is so stressful, and such a minefield. So many of them are flakes or terrible at what they do. It seems like it should be a no brainer to have a service that reliably connects you with people who will do awesome work on your home. But I guess it's too hard to monetize that...
I'm actually going to disagree on the ServiceMagic comment that the contractor doesn't care.
I worked for a local contractor for several years, and we had to care, if anything, more, about those orders. Those jobs were the ones most likely to file with the BBB if something went wrong. Plus, enough bad reviews and they actually used to hide low-ranked companies.
Not specifically apropos of the buyout, but my experience with Angie's List has been similar to that of Yelp, that is, businesses that paid to advertise on AL were better able to maintain high rankings. The top-rated companies were not the best from either a quality or price perspective. While it's a great idea to crowd-source referrals for contractors like that, it's unfortunate that that model falls prey to the same impulse to increase revenue by soliciting advertising contracts with the firms that it purports to rank impartially.
I think this is why TripAdvisor is better, in my experience, for restaurants than Yelp. If I'm not mistaken, TripAdvisor makes most of its money off of hotel booking referrals.
The "How I Built This" is an incredibly well done podcast. I know this is a little off topic but it's likely a podcast many at HN would find interesting as it's about how entrepreneurs built their businesses.
> Angie's List is a US-based website containing crowd-sourced reviews of local businesses. For the quarter ending on June 30, 2016, Angie's List reported total revenue of US$83,000,000 and a net income of US$4,797,000.
> Angie's List had its first profitable year since founding in 1995 in 2015.
> In 2013, investors worried that the company had been in business for more than 18 years, yet never had shown an annual profit, and that valuations of the company were unrealistic based on the actual revenue the company produces. But by 2015 growth estimates indicate a significant earnings-per-share growth, with a long-term growth rate at 19%. Combine this with stock estimates rising in 2015 by 13.3%, some Securities research firms such as Zacks Investment Research indicated ANGI is well-positioned for future earnings growth.
M&A 101 - Inflated asset valuations, Transaction driven (legal fees, professional services fees, bonuses, write-offs, etc.), Top-line stuffing, and most importantly - Done with other people's money. M&A is not where you look for rationale.
The companies to beat are Thumbtack and maybe ProReferral aka red beacon. They seem to have the right monetization schemes. Also, I would think that the big box home improvement stores like Home Depot drive huge referral traffic.
Also one of these companies should team up with HGTV.
Five years ago I signed up for Angie's List because I liked the concept of a paid membership to keep the reviews legitimate and of high quality (I figured the type of person that would pay for a membership would leave better reviews). Angie's List itself would highlight this in their advertisements at the time.
After using the site for a bit I realized that they were giving preferential sorting to "coupon baring providers" (and to have coupons your business has to pay Angie's List). They were taking from both ends and compromising the one thing they were supposed to be better than their competitors at. I specifically stated this was why I was cancelling and actually got back a seemingly personalized email saying "I have passed along your feedback regarding this issue. While I cannot promise that our policy will change, I will personally see to it that your idea is discussed with other Angie's List personnel and that it will be seriously considered."
Fast forward four years and I get a notification of a class action settlement in my email because of this very issue (and some other shady stuff they were apparently doing). I guess the Angie's List personnel didn't consider what I wrote seriously enough...
I went with top 1-3. One was amazing and professional, though quite expensive. He more than earned his paycheck by fixing installation errors left behind by two providers before. The other 2, were just average in workmanship, which surprised me based on their high ratings. You can clearly tell were making up through volume.
If you are the type of person who doesn't mind paying 20%-30% extra for higher quality job without cutting corners, it's not easy to spot them in Angie's list.
Having not heard of Angie's List before I decided to check their website out. If anyone working on that is reading HN, you might find it interesting that I didn't understand at all what the website was for until reading all the way down to the testimonials.
Until then it was all about how happy users are and how many solutions it provides.
Might be a good idea to put a one-liner explanation somewhere very visible.
It's a sales funneling technique. By the time the user has reached the bottom, he has been prepped with all the glowing testimonials and ready to sign up. For a casual visitor, as blunt as it is, you are not their target audience.
I have always been super skeptical how Angie's list stays in business and continues to grow competing against Yelp, Thumbtack, FindAPro, Porch, etc. Turns out I was wrong about Angie's list (sort of).
Angie's list earnings have been all over the place missing and beating, and for me was a big fat red flag.
I noticed it was increasingly easy to get memberships; I saw several groups promoting free AL memberships as a side benefit last year. Now it's free to join, apparently. Not sure if these numbers capture that shift, but loss of subscriber revenue was, apparently, a plus not a minus.
It was more useful when it was limited to paying members. I'm sure IAC sees easy profit in shifting to a "if you're not the customer, you're the product" model.
At least one of the brands you listed was close to buying them in 2015, but then it all fell through. Sounds like IAC was also in the process of making them an offer at that same time as well.
Surprised Angie's list was able to get this much, every impression I had was they were doing poorly, especially after the layoffs a while back. Would be interesting to have been a fly on the wall during the negotiations.
Is there value in Angie's List? Every time I wind up there from the open Internet, I wind up not knowing what I'm doing and eventually leaving. Is it like a yelp that you have to sign up to get access to?
For a split second, I misread the headline as IAC buying AngelList and my brain went "whoa!", wondering why that crew sold to IAC of all organizations, what this meant for angel investing, what chaos would ensue, etc. Then I blinked and re-read the headline with relief.
Can't say I have had a bad experience with them... yet. I have only used Angie's list for 1 year, and used 3 companies listed there. All 3 did amazing work. I live in a big city where I get a lot of options, so filtering the bad ones out is not always easy. I never used one of their coupons... just read a lot of the reviews. I like how they break down the review into sub categories. For example, I can be looking for an electrician to install ceiling fans, I can find reviews about exactly that... instead of just finding electricians in general.
I have used Angie's List for a few recent jobs, if for nothing else, a yellow pages of businesses with at least some feedback attached. I'm aware of potential, if not clear, risk of bias, but I struggle finding other alternatives that have both quantitative and unbiased feedback.
And unfortunately, I've not had much luck historically going off word of mouth.
Nothing consistent. Part of the problem is that a lot of local contractors and businesses still somewhere around 1995 in term of technology. And it's probably even worse when you get even a short distance away from urban centers. I actually find the Yellow pages can still work better than the alternatives. If someone only has 2 reviews they might as well not have any.
I never used Angie's List, but it used to blow my mind that they used buy expensive TV ads and sell cheap web ads. I never could figure out how they would make that work. This was about 4-5 years ago.
I've heard it from a friend working at one that it's 0.5-2% of a deal (the bigger the deal the smaller the cut), and here's a Quora discussion that corroborates that figure [0].
For public deals, banks will give a fairness opinion and they have to publicly disclose their fees in the relevant securities filings. This data is aggregated by various services (likely behind a paywall), which would let you slice and dice it by deal size.
[+] [-] birken|8 years ago|reply
Angie's List went from a membership based review service and tried to unsuccessfully turn it into a marketplace which never worked. In the process they didn't invest in their most valuable asset which was high quality reviews of service pros and a lot of consumer trust. Maybe they are still the best right now for reviews, but that is going to change very soon and this acquisition will just accelerate that.
HomeAdvisor is just a sales and marketing company (which has been around since 1999 as its old name, ServiceMagic). They aren't a technology company. They have huge teams of sales people calling pros and selling them on buying consumer leads. Consumers fill in their information for a job and their system just matches them with the pre-sold leads from their sales team. The experience is poor from the consumer side (you often get matched with terrible pros who aren't interested in your job) and is even worse from the pro side (they are paying to be matched for a job they don't want). Pros hate it, they churn at huge rates, which is why HA needs a big sales team. It's a business and they make money but it isn't the type of business that can grow very big.
I'm not even sure why this transaction is interesting. Angie's List has been trying to sell themselves for a long time and has gotten to the point where their stock dropped enough that this deal today is "good" that was bad a year ago. HomeAdvisor has been around for 18 years and will go the way of the Yellow Pages in 3-5 years. Just rearranging the deck chairs on the Titanic.
[+] [-] diyseguy|8 years ago|reply
I finally resorted to asking around in my neighborhood and found a good plumber who was not listed on Google maps or any other online source. Reasoning was obvious: one bad review and your business is shot down forever, the best thing to do is to stay off the radar.
[+] [-] nodesocket|8 years ago|reply
[+] [-] zippergz|8 years ago|reply
However, over the past few years, it really seems like it has stagnated, and it's clear they've changed their focus. It's harder to find people who have many recent reviews, and they're always trying to push "coupons" in your face.
These days more often than not, I get recommendations from our neighborhood Facebook group (sometime Nextdoor as well, but Facebook is much more active here). The track record isn't quite as good as Angie's List was in the glory days, but it's a lot better than Yelp or just randomly searching.
Hiring service pros is so stressful, and such a minefield. So many of them are flakes or terrible at what they do. It seems like it should be a no brainer to have a service that reliably connects you with people who will do awesome work on your home. But I guess it's too hard to monetize that...
[+] [-] Endy|8 years ago|reply
I worked for a local contractor for several years, and we had to care, if anything, more, about those orders. Those jobs were the ones most likely to file with the BBB if something went wrong. Plus, enough bad reviews and they actually used to hide low-ranked companies.
[+] [-] Naritai|8 years ago|reply
[+] [-] dhd415|8 years ago|reply
[+] [-] narrator|8 years ago|reply
[+] [-] erikpukinskis|8 years ago|reply
The solution is classification instead of ranking.
I am more interested in a Mediterranean place that cooks falafel to order and has tahini sauce than I am in a 4-star Mediterranean restaurant.
Conveniently those are all verifiable facts, so there's no need to wrestle with subjectivity.
[+] [-] mikikian|8 years ago|reply
https://www.angieslist.com/articles/angie-hicks-npr-s-how-i-...
[+] [-] BinaryIdiot|8 years ago|reply
I highly recommend!
[+] [-] NHQ|8 years ago|reply
[+] [-] tedmiston|8 years ago|reply
From https://en.wikipedia.org/wiki/Angie%27s_List:
> Angie's List is a US-based website containing crowd-sourced reviews of local businesses. For the quarter ending on June 30, 2016, Angie's List reported total revenue of US$83,000,000 and a net income of US$4,797,000.
> Angie's List had its first profitable year since founding in 1995 in 2015.
> In 2013, investors worried that the company had been in business for more than 18 years, yet never had shown an annual profit, and that valuations of the company were unrealistic based on the actual revenue the company produces. But by 2015 growth estimates indicate a significant earnings-per-share growth, with a long-term growth rate at 19%. Combine this with stock estimates rising in 2015 by 13.3%, some Securities research firms such as Zacks Investment Research indicated ANGI is well-positioned for future earnings growth.
[+] [-] kkotak|8 years ago|reply
[+] [-] sjg007|8 years ago|reply
Also one of these companies should team up with HGTV.
[+] [-] tnorthcutt|8 years ago|reply
https://mobile.twitter.com/tnorthcutt/status/567747019726409...
[+] [-] eco|8 years ago|reply
After using the site for a bit I realized that they were giving preferential sorting to "coupon baring providers" (and to have coupons your business has to pay Angie's List). They were taking from both ends and compromising the one thing they were supposed to be better than their competitors at. I specifically stated this was why I was cancelling and actually got back a seemingly personalized email saying "I have passed along your feedback regarding this issue. While I cannot promise that our policy will change, I will personally see to it that your idea is discussed with other Angie's List personnel and that it will be seriously considered."
Fast forward four years and I get a notification of a class action settlement in my email because of this very issue (and some other shady stuff they were apparently doing). I guess the Angie's List personnel didn't consider what I wrote seriously enough...
[+] [-] pcurve|8 years ago|reply
I went with top 1-3. One was amazing and professional, though quite expensive. He more than earned his paycheck by fixing installation errors left behind by two providers before. The other 2, were just average in workmanship, which surprised me based on their high ratings. You can clearly tell were making up through volume.
If you are the type of person who doesn't mind paying 20%-30% extra for higher quality job without cutting corners, it's not easy to spot them in Angie's list.
[+] [-] wnevets|8 years ago|reply
[+] [-] yjgyhj|8 years ago|reply
Until then it was all about how happy users are and how many solutions it provides.
Might be a good idea to put a one-liner explanation somewhere very visible.
[+] [-] ww520|8 years ago|reply
[+] [-] robotresearcher|8 years ago|reply
Apparently the customer was happy to pay 0.5B without that advice. AL sold a company, not a product, and they closed the deal.
[+] [-] nodesocket|8 years ago|reply
Angie's list earnings have been all over the place missing and beating, and for me was a big fat red flag.
[+] [-] Digory|8 years ago|reply
It was more useful when it was limited to paying members. I'm sure IAC sees easy profit in shifting to a "if you're not the customer, you're the product" model.
[+] [-] Danihan|8 years ago|reply
[+] [-] Throwaway27b|8 years ago|reply
[+] [-] runevault|8 years ago|reply
[+] [-] tedmiston|8 years ago|reply
https://finance.yahoo.com/chart/ANGI#eyJtdWx0aUNvbG9yTGluZSI...
End of day market cap $352M with a 41% surge after hours.
[+] [-] debacle|8 years ago|reply
[+] [-] Geekette|8 years ago|reply
[+] [-] BlackjackCF|8 years ago|reply
[+] [-] mandeepj|8 years ago|reply
[+] [-] simonebrunozzi|8 years ago|reply
[+] [-] dfar1|8 years ago|reply
[+] [-] jader201|8 years ago|reply
And unfortunately, I've not had much luck historically going off word of mouth.
Has anyone else had any luck with alternatives?
[+] [-] ghaff|8 years ago|reply
[+] [-] hantusk|8 years ago|reply
Alternatives are my network with personal recommendations
[+] [-] unknown|8 years ago|reply
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[+] [-] jgalt212|8 years ago|reply
[+] [-] gondo|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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[+] [-] philfrasty|8 years ago|reply
[+] [-] HappyKasper|8 years ago|reply
[0]: https://www.quora.com/What-is-a-typical-M-A-fee-for-an-acqui...
[+] [-] orionsbelt|8 years ago|reply
[+] [-] webninja|8 years ago|reply
[+] [-] accountyaccount|8 years ago|reply
[+] [-] mehh|8 years ago|reply