Angie’s List – a review site got proposal by IAC (InterActiveCorp) for acquisition

In the good old days, buying anything from property to electronics would mean asking someone to guide you through the best buy. You won’t indulge in any purchase without involving your entire family and friends in the process. Community review is an age old tradition, which helps the buyer make the right choice, and invest in the right thing. Conventionally, you would ask your friend or family member, who would in turn ask their friends or connections about the purchase you are planning. Communities spread through word of mouth, and you would get the perfect review at the end of the whole deal. The same happened for movies, services etc. You needed a doctor in your vicinity; you asked the neighbors or someone known to the area. Web 2.0 has converted the conventional method of review to give it a digital avatar. You will find the same community translated to the internet. Communities were local, and products or services required word of mouth reviews. The web world has translated the communities to global, and the products or services are reviewed by this community on the different dashboards, where the company has marked the presence. This whole internet community gave rise to review based websites, and marketplaces where you would not just be able to get the service or product you need, but also manage to get the reviews for the different providers.

Angie’s List is a business review site, which offers genuine reviews for the services you wish to hire from the ones listed on this website. The companies and individuals that have listed their services are not just reviewed here, but also hired from this website. Yes, you have a hire now button, which allows users to hire the right service provider from the website. This website assures good pricing for the different services, and quality service providers. You also find member guarantees listed on this website, which will get you the best possible service for your work.

Let’s understand how this business rating website works and how it generates the revenue.

Angie’s List: How to Use?

This is an online network which hosts the top notch service companies and health care providers on their site, thus extending help to about 2 Mn households. You need to be a member to post your review on the companies listed on this site. About 60,000 reviews have been written about the companies listed here every month. The reviews include the project details, how it went, the pricing for this project, professionalism exhibited and the quality of work. The reviews are then rated by the website, and then given ranks based on the reviews, and their rating for the different parameters.

All the reviews present on this website are original and genuine. Companies or individuals are not allowed to review themselves on this platform. So, companies cannot gain an edge over competition without offering quality service. You are ranked and rated well only if you fulfill all the requisite parameters.

How it Generates Revenue?

There are two sources of revenue for this consumer review platform– service provider fee and membership fee. About 60% of the revenue is generated from service provider fee while the latter forms 40% of the revenue. Advertising is an additional revenue source for this website. For each service provider confirmed by the end user, the service provider will be charged some percentage amount by the website, which works as a source of revenue here. Apart from that, Angie’s List works on subscription method. A few core features are offered for free, while some additional important features are given to the members only when they take the paid version of this service. You can even review on app, which allows in-app advertising as additional source of revenue.

Acquiring Angie’s List

The popularity of this web application has made IAC (InterActiveCorp) come up with an offer to acquire the website at $8.75 per share, and the whole deal is going be done in cash. The amount being paid by IAC is really high for Angie’s List, despite the losses and setbacks that the website has faced over a period of time.IAC would be paying more than $500 Mn for the review service. The reason stated by IAC is that the collaboration would work as a win-win situation for both companies, and would help the end users gain more from a single network.

It took Angie’s List a lot of effort to come up with a good business directory, and offer an excellent website with intuitive interface. The database and the efforts have paid off in the form of this acquisition.

A review website is the need of the hour. You should strive to search for a niche, where you can establish your user based review website, and generate revenue, if you are indulging in similar website development.