Yes, Fellow Fools, Angie's List (Nasdaq: ANGI) really was and still is the worst IPO to come to market in 2011. Renren (Nasdaq: RENN) may have shed more than 70% since its debut which is considerably worse than Angie's List, but at least the Facebook of China has a shot at one day being profitable and keeping its costs under control. I'm not so sure I'll ever be able to say the same thing about Angie's List.

The Internet-based company, which relies on paying members to voice their opinion on everything from dentists to plumbers so consumers can make educated choices about whose business they procure, reported its fourth-quarter results last night, and, unsurprisingly, the losses continued.

In the fourth quarter, paid membership grew 78% to 1.07 million and net sales jumped 70%. The company also boosted its customer retention rate to 75% and added 9,000 participating service providers over the year-ago period. Unfortunately, these numbers are still not good enough to turn a profit. In fact, the company lost $0.14 during the quarter, which is $0.03 worse than what Wall Street had predicted.

The losses aren't anything new for Angie's List. As Fool Tim Beyers opined back in November, shortly after the company's IPO, Angie's List has lost money for 16 straight years. That's something usually attributable to a biotech company -- not a growing Internet-based business. The last time I checked, Internet-based business that lost money fizzled away in the early 2000s, but somehow Angie's List has avoided that peril.

The main reason Angie's has avoided insolvency is its reliance on secondary offerings and debt to finance its day-to-day operations. Aside from the cash raised from its IPO, cash flow would probably not have reversed a previous three-year streak of being negative.

Marketing expenses and competition, though, remain my biggest concerns for Angie's future.

The company's first-quarter spending forecast of $17.5 million to $18 million is nothing short of aggressive. Marketing costs are the primary reason Angie's List can't turn a profit, and its first-quarter marketing budget is already about 68% of what it spent in all of 2011 and about $4 million more than it spent in all of 2010. Even with its costs per customer acquisition falling in 2011, these rapidly rising marketing expenses aren't going to allow the company to turn a profit.

The barrier to entry is also nearly nonexistent, with numerous competitors easily able to undercut Angie's pricing or business model altogether. Google (Nasdaq: GOOG), Yelp, and FourSquare all offer a similar service to Angie's List -- yet all three are completely free! There's basically nothing that would stop Yahoo! (Nasdaq: YHOO) from using its $2 billion in cash and launching a competing service to Angie's.

Customers of Angie's need to pay to read consumer reviews. As for me, I'm going to offer up one for free: Angie's List will never be profitable! The business model just doesn't work, and there's little doubt in my mind that regardless of how rapidly the company's marketing expenses increase, it will not be able to reach a large enough audience to turn a profit. I'm staying vigilant in my CAPScall of underperform on Angie's List. The question now is: Would you do the same?

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