The search giant, which has hired much of the staff of the soon-to-be-shuttered Homejoy, looks to take on category leader Angie's List (NASDAQ:ANGI) as well as new kid on the block Amazon.com (NASDAQ:AMZN). Google isn't buying the home services company in which it was also an investor; it's simply hiring a lot of its staff, according to ReCode.
Around 20 members of Homejoy's product and engineering team will be joining Google to build out the company's technology for matching local professionals -- lawn mowers, painters, plumbers, cleaners and the like -- with online users, according to sources.
Google confirmed the hires to the technology news site, but did not make any further comment. Homejoy announced its closing on its homepage and explained it (to a point) on the company's blog.
Although we succeeded in many ways, we also faced obstacles. There are still many unresolved challenges in the home services space. We gave it our all, but regretfully, we have made the difficult decision to cease operations. Homejoy will officially close its doors on July 31st.
It's a sad end for a company that had raised $40 million from investors. But Google taking on much of the staff at least dulls the blow of another well-funded company, based on a good idea, not making it.
In 2012, Homejoy set out to shape the future of home services. It's been a privilege, but it's time to say goodbye: http://t.co/nE4fC2Xw6k— HOMEJOY (@Homejoy) July 17, 2015
What is Google likely to do?
Though the company has not made any comment on how it plans to employ the Homejoy team, it seems likely that they will take on the task of integrating home services and search. This seems like a very logical match as the search volume for "How do I find someone to paint my house?" or "Local person to mount TV" and other similar queries must be very high.
Google has a chance to cut off its rivals at the pass. You have to go to Angie's List or Amazon to see their search results, but Google can deliver answers and facilitate transactions directly through search. Essentially, the company will be cutting out the middleman. That's something Google has been doing on an increasing basis with its search results.
For example, if you search for something that's trending on Twitter, Google used to return articles about that tweet. Now, the lead item is more often than not the actual tweet. The company has done this both to improve customer experience by streamlining results and to shuttle users to its own services (with YouTube being a prime beneficiary).
Will it work?
While Homejoy failed, it was not because of technology and Google has scored a coup by picking up its team. That should allow the company to quickly build out its own products in this space.
The search leader is very well positioned to sell home services, and it should be able to win market share simply from getting to customers first. This is a case where the lines get very blurry in how Google delivers results. Will it serve up its own service when Angie's List (which requires a subscription), Amazon (which does not), and other offer results?
The answer there is probably, unless the competing services are paying the search company for better placement. Either way, Google wins, making this a very smart business for the company to enter.
Daniel Kline has no position in any stocks mentioned. He would love to hire someone to paint his living room cheaply. The Motley Fool recommends Amazon.com, Google (A shares), Google (C shares), and Twitter. The Motley Fool owns shares of Amazon.com, Google (A shares), Google (C shares), and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.