Online Review Sites Shouldn’t Ignore the Importance of Synergies: Angie’s List Inc (ANGI), Yelp Inc (YELP)

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Its search engine receives hundreds of millions of users every month and it is easy for Google to continue expanding their collection of local results. Supporting this operation Google has a mature and profitable business, unlike these small competitors. Its return on investment of 14.4% and profit margin of 21.4% show that Google understands where to profitably invest its resources. With a total debt to equity ratio of 0.08 there is no debt holding Google back and similar competitors like Yelp ought to be worried.

Conclusion

Angie’s List’s strategy of focusing on the high end of the market looks promising. Right now it is too early to tell just how things will play out, but there may be a David in this story. Google’s profitable base in search and successful ventures into the mobile sphere make it a solid investment, regardless of Angie’s List’s growth.

The article Online Review Sites Shouldn’t Ignore the Importance of Synergies originally appeared on Fool.com and is written by Joshua Bondy.

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