Angie’s List facing a hostile takeover and competition
It may seem hard to believe, but not all businesses that advertise put their ads on the internet, said Rohit Kulkarni, an internet analyst with RBC. He said many small businesses still promote themselves like it is the 1980s.
“On local tv, on local radio, direct mail,” he said.
Even in the yellow pages. Remember those? Kulkarni said this means if you’re in the business of e-commerce or online advertising, you may see those local ads as a huge, untapped market.
“You have anywhere between $100–$150 billion spent by these small local businesses on local advertising,” he said.
Which is why IAC/InterActiveCorp, Amazon and Google are moving into the home services space. IAC is after Angie’s List. It’s put in a hostile bid of more than $500 million for the website where consumers pay to read reviews of service providers like roofers, plumbers and painters. Google is testing a new ad service for electricians, contractors and handymen who do those special jobs around the house that you can’t, and Amazon has a new Home Services website.
Neil Doshi, a research analyst with Mizuho Securities, said Amazon is also offering a new feature for consumers: guaranteeing the services they pay for.
“So if you’re not happy – you don’t pay for it,” he said.
Good for consumers of course. But for small businesses, reaching the hundreds of millions of customers that Amazon and Google have access to may also pay off big time.
“If you’re looking to buy some plumbing material on Amazon,” Doshi said, “you might also need a plumber.”
Correction: A previous version of this story stated that Angie’s List did not offer service guarantees. Angie’s List was not available for comment when this story first aired. A company rep says it just introduced a service quality guarantee, available only for certain members.
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