Both Angie’s List and Yelp need to hire more talent and personnel to keep pace with this space. Both firms combined employ less than 2,000 (Yelp – 1,479, Angie’s List – 349) employees. These is no way you can manage real growth, quality growth in the local recommendation space – without people. People are the core of this business and both Yelp and Angie’s need to remember this important fact to gain and hold an advantage. More employees monitoring content could have avoided the most recent Yelp “bad review” issue that’s gone micro-viral.
The $800 GOOGrilla
Google Inc (NASDAQ:GOOG) is a real threat to Yelp and Angie’s List. A growing number of consumers are turning to Google Maps instead of Yelp or Angie’s List to get local business information. Consumers using smartphones to find addresses and maps using Google tend to stay within Google’s applications and services — consumers simply bypass Yelp or Angie’s List altogether. As Google creates better mapping, geo-targeted apps and mobile ad synergy, Yelp and Angie’s List may be seen as less relevant in the SoLoMo (social-local-mobile) space. Google beating out Facebook to purchase the Israeli mapping application Waze for $1 billion shows how aggressive Google is about SoLoMo.
Google has benefited from Google Maps being pre-loaded on Apple iPhones since 2007. Apple Maps became the “preferred” map app on the iOS platform. This was good for Yelp since Apple Maps currently uses some Yelp data to make the maps more relevant to iPhone users. While Yelp and Angie’s List are far more focused in the local recommendation space, Google has the technical skill, money, and breadth and depth in maps and data coverage to take market share and become dominant as SoLoMo grows. This is more of an issue for Yelp. Angie’s Midwestern roots gives this company a major “human” advantage that pure play technology firms like Google and Yelp will never be able to match — Angie just has to remember to keep users happy.
Advantage: Angie
Angie’s List Inc (NASDAQ:ANGI) has easier steps to take to become dominant in the local recommendation space. Expand the Super Service Award — make it a really big deal. Have an awards ceremony. Have a convention that enthuses members and vendors alike, while growing the brand. Add relevant functionality to Angie’s List — create a real local recommendation engine for members and vendors. These are just some of the things Angie’s List must do to become the de facto standard in the local recommendation space. If it can do half of these things, it will be far superior to anything Yelp Inc (NYSE:YELP) or even Google can offer. Angie’s List memberships have grown 60% while revenue rose 68% to $52 million. The company lost almost $8 million, mostly due to high advertising costs to grow the brand — but overall revenue was up 78%. Angie’s List — right now — is the stock to beat in local recommendation.
The article Why Angie’s List Beats Yelp originally appeared on Fool.com and is written by John Moore.
John Moore has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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