Paper Tiger or Sleeping Giant: The Birth of ANGI Homeservices

A $500 million merger aimed at stomping out the relevance of friends and family referrals

October 05, 2017
Home Advisor

From a commercial as part of the "Just Ask Home Advisor" marketing campaign, which challenges the friends-and-family referral concept. 

On Oct. 2, Home Advisor and Angie’s List officially became ANGI Homeservices (ANGI), following the successful purchase of Angie’s List by Home Advisor parent company IAC.

While ANGI president Craig Smith offers assurances that the two brands will remain separate, the merger still potentially gives listing professionals instant access to a much wider audience, spanning 400 markets. Yet, the real selling point of ANGI, at least according to HomeAdvisor CEO Chris Terrill, is expanding share and services. Upon completing the $500 million transaction, HomeAdvisor’s staff grew by a third, and the new company is projecting a 20 to 25 percent compounded growth rate over five years. Confident (or optimistic), ANGI has promised new products, services, and technology across its brands including Same Day Service, Instant Booking, and Instant Connect.

“Combined, the two marketplaces expect to see millions of homeowner requests a month and the overlap [in audiences] is not significant,” Smith says. “As more home remodelers and general contractors move online and move their business to mobile, we have robust mobile apps.”

An important part of ANGI’s strategy is to specifically target Millennials, who “want instant, on-demand experiences and convenience when it comes to all aspects of their lives,” Smith says, “including finding a pro to remodel their kitchen.”

Yet while the Millennials are unique in some ways, they still favor word-of-mouth referrals for selecting a contractor, just like prior generations. That’s a dynamic that ANGI is hoping to change.

As a single company, ANGI will be better positioned to “rapidly grab share from our single biggest competitor,” Terrill said, in a statement. He identified that competitor as word-of-mouth referrals.

About the Author


About the Author


James McClister is managing editor for Professional Remodeler.

Comments

Home Advisor's business approach regarding leads don't consider "small" remodeling companies. I've been in the business since 1992, and have maintained a general contractor's license since 1996. My company is small on purpose..I won't attempt to delineate that for those who might not get it. We're into quality..we're into high-end customer service..we're into complete customer satisfaction at job completion.

HA's leads are stacked too deep for the business model we maintain. It's like going to Wal Mart to buy a bag of chips. It's too corporate..nothing personal about it. If one doesn't respond to a HA text lead within 15 minutes of arrival, one gets charged for it regardless. As owner and active participant in daily job tasks (yeah, I get dirty), I have no interest in responding to 4 or 5 leads a day while being aware that there are 10 other companies in my area that are scrambling to respond simultaneously to the same jobs. HA's about volume..and charging for leads that they are fully aware will result in no paid jobs for 80% of their affiliated contractors. Their services will never cater to a small remodeling company such as ours, in my opinion. We're going to be content in not serving the " instant, on-demand, way-too-convenient" aspect of the Millennial customer base. We'll accept the "old-school" label and continue to provide superior quality work and customer service and see whom survives. I wish them luck.

As a post-script, my affiliation with the original Angie's List has been very positive. Those successes were based totally on a true " word-of-mouth" customer base... e.g. " This company did a great job at a reasonable price and I'll hire them again." That's still the best reference for folks involved in the service industry, IMHO.

I, like the contractor above, find all internet referral services to be useless for his and my particular high-end niche. More importantly, Home Advisors is the fallout from nefarious and defunct Service Magic. While Home Advisors paints a different picture, as the contractor above points out, their approach is identical to that of Service Magic. And, while Angie's List may excite some of you, the promotion of your listing is based on money, yours to be specific. The more you pay, the better position you receive. Angie is not clean. Beware. Better to hook up with Houzz if you do artisan work.

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