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Great Web based service, Angie’s List facing problems lately

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The Indianapolis based publicly traded Angie’s List is a Web based professional offering helping you to locate a reliable service provider such as a plumber or a babysitter in your local area. The company is experiencing a downhill stock performance losing more than 57 percent so far this year and missing earnings and sales forecasts.

The crowed-source based reviews of its service provider Web sites of local businesses is its main concept. Based on price, quality of service, responsiveness, punctuality and professionalism, it provides a report card style grading that range from A to F of its paid subscribers. The grade is calculated based on customer reviews. Subscribers have their own page containing information about the service and customer reviews.

The concept is a great idea. Customers provide genuine review of service they received from service providers. However, the concept provides a dilemma. Angie’s List earns more than 70 percent of its revenue from advertising. Companies pay to advertise on Angie’s List while company philosophy calls for “companies can’t pay to be on Angie’s List.” Company also charges consumers to access its ratings. In addition to disappointing earnings, lawsuits and free similar services on the Web are contributing to the recent problems it is facing.

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