Monday, November 12, 2012

A Review Of Angie's List

Angie’s List was a great idea when it was co-founded in 1996 by Bill Oesterle and Angie Hicks. It was an even better idea to move it to the Internet in 1999.

The beauty of the business model is that members subscribe to gain access to the reviews of other members, who write them for free. It was a decent value for me at first for only $15 and the owner of the company that built our deck in 2009 told me he got a $20,000 job from my review within a couple of weeks of my writing it. I suspect that social media has rendered Angie's List less valuable than it used to be but they substantially raised subscription rates, at least for Greenville, South Carolina. Angie's List does not charge the same for every city. One city can be four times the cost of another.

When I worked for Hearst Media Services selling Internet advertising products, I noticed that more and more business owners told me Angie’s List was pressing them to buy a business membership. As a customer, that was a concern since their selling proposition is that their reviews are completely objective.

Recently, I noticed that I never use Angie’s List at all anymore. Our neighborhood Homeowner's Association has a residents-only Facebook group. Half to three quarters of the posts are by people asking for, and receiving, advice about local businesses to hire. Why should I pay Angie’s List to give me reviews from total strangers, that may or may not be objective, when I can get free reviews from neighbors I know personally? So I checked my credit card bill to see when my last charge from Angie’s List was. It just so happened to have been charged a couple of weeks earlier in October. It was for $40, over 2 ½ times the 2011 cost! I cancelled and they refunded the money.

According to this article in the October 9th Indianapolis Business Journal, Angie’s List is being sued over exactly this practice of renewing subscriptions at higher rates without explicit permission from the subscriber..

This Forbes article from November 9th points out that shares of Angie’s List are 20% lower than insider Michael S. Maurer purchased them for on August 1st.

Angie's List trades on NASDAQ: ANGI. I don't recommend it.