Angie's List Has (Another) Serious Problem

Investors hoping for a recovery in Angie's List (NASDAQ: ANGI  ) may be in for a disappointment, Fool contributor Tim Beyers says in the following video.

What's the problem now? eBay (NASDAQ: EBAY  ) . After a successful trial run in the United Kingdom, the auctioneer has decided to launch "eBay Hire" here in the U.S. Like Angie's List, the service is designed to put shoppers together with local service providers who list their services, bio, and rates.

eBay doesn't plan to charge for "Hire" in the first few months of the life of the service, TechCrunch reports. That should change once there are enough service providers and consumers tapping the service, at which point eBay plans to levy a transaction fee similar to what users pay when auctioning products in the online marketplace.

Can Angie's List endure the assault? Tim cites two reasons to be pessimistic. First, eBay already serves hundreds of millions of registered users versus just 2 million Angie's List members. Newbies with a need to find a reputable contractor are more likely to try eBay. Second, Angie's List is already cutting prices in what looks like a response to stiff competition. There's no evidence the company enjoys a sustainable competitive advantage, Tim argues.

Do you agree? Are you willing to give Angie's List the benefit of the doubt? Please watch the video to get Tim's full take and then leave a comment to let us know where you stand.

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  • Report this Comment On November 27, 2013, at 5:40 PM, Dadw5boys wrote:

    I don't see a problem here. Have you ever tried to post a negative review on ebay without kissing the sellers butt ? if you ever need to try and see !

  • Report this Comment On December 20, 2013, at 3:51 PM, Yiannis51 wrote:

    Angies List has become a venue for agressive service providers who spend the most money advertisng with them and soliciting on the spot reviews (a form of not so subtle pressure while the provider watches over the customer as they complete the review) so to pad their numbers. Those who refuse to spend money advertising with Angies List and prefer to just rely on authentic unsolicited reviews for their scores simply get lost on the list.

    Greed has begotten Greed!

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