
Angie's List Acquired for $500M by IAC - rayuela
https://www.bloomberg.com/news/articles/2017-05-01/iac-to-acquire-angie-s-list-in-deal-valued-at-about-500-million
======
birken
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.

~~~
diyseguy
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.

~~~
noxToken
I have found that this is one of the most redeeming qualities of Next Door.
Among the people selling "gently used" crap that no one would even take for
free, the NIMBY crowd, the easy racism under the guise of neighborhood watch,
the MLM moms, and the "THINK OF THE CHILDEN" crowd, Next Door has been spot on
for recommendations.

There are small business owners who make posts every two weeks are so about
their super amazing lawn care business providing 10x the quality of TruGreen,
but if you ask for recommendations, people flock in droves on both sides.
Users give glowing praises for good experiences, and they will absolutely
crucify a business for bad experiences. Sometimes you have to tease out
details, but it's way better than a context-free review post to Google or
Yelp.

It's very common for a review on a website to have a business with a 4 star
rating and a couple negative reviews. The negative reviews will only say
something like, "Terrible experience. I will never user ${business} again!"
Thanks buddy! You've given me 0 reasons to avoid this place. Next Door allows
you to engage other locals on why the experience was poor.

I just hope that Next Door doesn't try to pivot and capitalize on this. The
system in place is perfect for recommendations, and I would hate for them to
create some weird Yelp-esque review system within the app.

Edit: This isn't confined to Next Door. Any forum where you can engage
neighbors or locals with conversation will be better than a review site.
People rarely go into enough details on why an experience was positive or
negative. An HVAC company can refill refrigerant for a low price, but their
duct work can be extremely pricey and sub-par. Reviews probably will not
capture that type of information without asking what the user had done, how
much it cost, promptness, time to complete the work, etc. Added these
interview-style questions on a review site probably won't help, because will
likely not submit a review where all of these are required fields.

~~~
rayvd
Next Door is great for the neighborhood watch stuff. It would be kind of cool
to aggregate camera feeds...

------
dhd415
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.

~~~
narrator
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.

~~~
covercash
Foursquare is my secret weapon whenever I need to impress with restaurant
selection.

~~~
rexf
I use 4sq & Swarm a bunch.

4sq's venue ratings is hit or miss. I've definitely found some good places to
eat at (that I would've otherwise not found), but I've also eaten at a ton of
places that are highly rated but nothing special. For the latter, perhaps they
are good relative to the immediate area, but not really that good.

~~~
tedmiston
Big fan of their SMS bot Marsbot as well if you haven't tried it yet. For some
reason it's very low key and they don't promote it at all, but it's a pretty
sweet product.

[https://marsbotapp.com/](https://marsbotapp.com/)

------
mikikian
For those interested, here's a "How I Built This" podcast for Angie's list
that I found interesting.

[https://www.angieslist.com/articles/angie-hicks-npr-s-
how-i-...](https://www.angieslist.com/articles/angie-hicks-npr-s-how-i-
built.htm)

~~~
BinaryIdiot
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.

I highly recommend!

~~~
DunkinYonuts
It's definitely interesting, but it's been rough to get through a few of them.
Some of guests spout sage-like advice with complete ignorance of any
survivorship bias.

Other ones, just when I think they're going to go that way, make humble
admissions that there was a confluence of people and ideas that they combined
with hard work to get to where they were at. So there are some good ones.

That all could be my side-line opinion though, tinted by my ego protecting
itself while I'm not successful.

~~~
BinaryIdiot
I think your criticism is very fair. I listen to a lot of podcasts that
interview founders and I find there are some who are humble and don't try to
give out advice and others who feel entitled to give everyone advice.

Ultimately what worked for one founder may never work for others. I try not to
take any of them as gospel and just enjoy the stories that I find interesting.

------
tedmiston
I would like to hear someone explain why it's worth $500M.

From
[https://en.wikipedia.org/wiki/Angie%27s_List](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
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.

------
tnorthcutt
I attempted to use Angie's List once as a paying customer; I found that it was
outright deceptive:

[https://mobile.twitter.com/tnorthcutt/status/567747019726409...](https://mobile.twitter.com/tnorthcutt/status/567747019726409728)

~~~
eco
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...

~~~
tedmiston
From Wikipedia:

> In August 2016, Angie’s List has agreed to settle three lawsuits for a
> payment of $1,400,000. The class action lawsuits focused on Angie’s List’s
> acceptance of advertising payments from service providers, and whether those
> payments affect service providers’ letter-grade ratings, reviews, and place
> in search-result rankings. Angie’s List denies plaintiffs’ claims, but
> disclosed that revenue from service providers can affect the order of
> search-result rankings of the service provider under certain settings. Moore
> vs. AngiesList.

[https://en.wikipedia.org/wiki/Angie%27s_List](https://en.wikipedia.org/wiki/Angie%27s_List)

------
yjgyhj
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.

~~~
ww520
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.

~~~
wingerlang
Who is the target audience? I also have no idea what it is from the website.

~~~
pnutjam
That's ok, they don't either.

------
nodesocket
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.

    
    
        2016 EPS
    
        Q1 -0.07
        Q2 0.08
        Q3 -0.28
        Q4 0.15

~~~
Digory
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.

~~~
gscott
I joined because it was free now it's now been a year and they're trying to
bill me for a new year. They never said it was free for only one year or they
buried it in the tos. I have unsubscribed from the service I find Yelp much
more useful.

~~~
magic_beans
The good thing about Yelp is that if you actually read through 1- and 2- star
reviews for otherwise highly rated restaurants or services, you realize pretty
quickly that it is the reviewer with some sort of problem, and not the
service.

------
runevault
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.

~~~
tedmiston
I've been following the stock for a few years and occasionally shorting it.
$ANGI has definitely been a strange one to watch.

[https://finance.yahoo.com/chart/ANGI#eyJtdWx0aUNvbG9yTGluZSI...](https://finance.yahoo.com/chart/ANGI#eyJtdWx0aUNvbG9yTGluZSI6ZmFsc2UsImJvbGxpbmdlclVwcGVyQ29sb3IiOiIjZTIwMDgxIiwiYm9sbGluZ2VyTG93ZXJDb2xvciI6IiM5NTUyZmYiLCJtZmlMaW5lQ29sb3IiOiIjNDVlM2ZmIiwibWFjZERpdmVyZ2VuY2VDb2xvciI6IiNmZjdiMTIiLCJtYWNkTWFjZENvbG9yIjoiIzc4N2Q4MiIsIm1hY2RTaWduYWxDb2xvciI6IiMwMDAwMDAiLCJyc2lMaW5lQ29sb3IiOiIjZmZiNzAwIiwic3RvY2hLTGluZUNvbG9yIjoiI2ZmYjcwMCIsInN0b2NoRExpbmVDb2xvciI6IiM0NWUzZmYiLCJyYW5nZSI6Im1heCJ9)

End of day market cap $352M with a 41% surge after hours.

------
debacle
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?

------
Geekette
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.

~~~
BlackjackCF
Yeah, I read this as well. And I was really confused, because IAC owns Match
and a ton of dating company properties.

------
dfar1
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.

------
jader201
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.

Has anyone else had any luck with alternatives?

~~~
ghaff
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.

------
jgalt212
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.

------
gondo
[https://www.angieslist.com/](https://www.angieslist.com/) -> Access Denied

------
philfrasty
Is it public (or common) knowledge what an IB like JPMorgan takes home in
terms of $$$ for a deal of this size?

~~~
HappyKasper
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].

[0]: [https://www.quora.com/What-is-a-typical-M-A-fee-for-an-
acqui...](https://www.quora.com/What-is-a-typical-M-A-fee-for-an-acquisition-
worth-50-million-500-million-5-billion)

------
webninja
IAC's stock just went up by ~19% this morning :O I only wish I owned more of
it.

------
accountyaccount
I don't care who owns them as long as they make reviews searchable. Drives me
mad.

------
mehh
That's a lot of money for a site I have never heard of!

------
kyleblarson
Barry Diller has a really interesting acquisition history.

~~~
whorleater
Barry Diller is mostly an advisory role at IAC now, Joey Levin handles the day
to day M&A for IAC.

~~~
bap
Diller is the chairman of the board. Levin has been CEO and running g day to
day operations for a bit now.

That being said it's important to understand that IAC businesses are run
fairly independently. Many (most?) have their own CEOs, etc.

Barry Diller had tried to get an acquisition of Angie's List before IIRC.

------
nunez
unusual purchase by iac. they've always focussed on dating apps.

~~~
vidarh
Match Group - which is what they group their dating sites in for financial
reporting - is one of 5 distinct groups they have investments in.

HomeAdvisor, which this purchase would presumably fall under, is another major
group that includes HomeAdvisor as well as a bunch of other brands. They've
made two other purchases for this group so far this year: HomeStars (Canada)
and MyBuilder (UK). As well MyHammer (Germany) in October last year.

------
simonebrunozzi
For a moment I thought I saw "Angel List" and I thought: IAC? What the...

~~~
timdorr
Swipe right to invest.

~~~
jacquesm
Funderr ;) Not the worst idea I've seen.

~~~
ceocoder
funderr.com is already taken, but funder.io is available. I call dibs - that
should be a thing btw, e.g. your honor, yes he actually built the app and ran
the product BUT I called dibs, on Twitter _and_ on HN, look at the timestamp.

~~~
wingerlang
DAAS, dibs as a service. Based on blockchain technology. Named something like
funderr, fundr, fundrio, fundrly. HN front page here we come.

