Google in turn responded this week to reports that it is in the process of acquiring Waze, an Israeli GPS based community-contributed live-time map program. The combination of Google’s and Waze’s data would compete against Yelp’s offerings. Likewise, an alliance better integrating Yelp and Apple Maps would compete fairly against the Google-Waze team.
A potential Apple-Yelp acquisition and complete integration would benefit both companies and help improve multiple offerings. Overall, Yelp has a great future ahead, with promising returns in the “reviews” business.
The other major player in Web 2.0 reviews is Angie’s List Inc (NASDAQ:ANGI). The site allows users to share their experiences with local professionals in service industries such as home improvement contractors, medical care, and automotive.
Named after Angie Hicks, who co-founded the company nearly two decades ago, Angie’s List Inc (NASDAQ:ANGI) has nearly doubled in value since going public in November 2011 at $13 per share. Its current market capitalization is about $1.5 billion.
Angie’s List Inc (NASDAQ:ANGI) first-quarter 2013 revenue was $52.2 million, an increase of 68% over the same period the year previous. Membership revenue in the first quarter of 2013 increased 47% to $14.6 million. Service provider revenue was the largest component of total revenue at $37.5 million and the fastest growing with a 78% growth rate year-over-year. Service provider revenue includes revenue from advertising contracts and fees from e-commerce transactions. Advertising revenue was $32.9 million in the first quarter of 2013, an increase of 89 percent compared to the prior year period and e-commerce revenue was $4.7 million, an increase of 24 percent year-over-year. However, in spite of all the revenue growth, and scaling back in marketing expenses, the company still suffered a net income loss of $7.9 million.
Unlike Yelp, there are no exciting rumors of a possible acquisition of Angie’s List Inc (NASDAQ:ANGI) by a bigger name company. Why the lack of love for Angie?
The company is not a new start-up. The company was started in 1996. It went public when it needed the funds to grow bigger. The lack of more substantial growth in both geography and membership is disappointing. Plus, the company is not map-based, nor does it need to be. Because the company is heavy on home improvement contractors that visit the customer, not the customer to the contractor, Angie’s List Inc (NASDAQ:ANGI) just doesn’t require map-based offerings. (It doesn’t matter where the plumber’s office is located, just that he is in the same town, and provides good service. The company would need to be map-based if you actually visited the plumber.) And that is one of the key features that makes Yelp so desirable to other companies.
Long story short, if you want to make money off other people’s business and opinions, stick with Yelp. If you need the name of a good plumber, look for one on Angie’s List.
The article How to Make Money off Other People’s Opinions originally appeared on Fool.com.
Erin McBride has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Erin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
