Angie's List

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Angie's List, Inc.
Type Public
Founded 1995
Headquarters Indianapolis, Indiana
Founder(s) William S. Oesterle, Angie Hicks
Key people John Chuang, Chairman
Scott Durchslag, CEO
Angie Hicks, CMO[1]
Industry Internet
Products 1. Advertising (70% of revenue) 2. Membership access to crowd sourced reviews of local businesses (30% of revenue)
Services Online marketplace, Review site
Revenue Increase US$ 245.642 million (2013)[2]
Operating income Increase US$ -31.081 million (2013)[2]
Net income Increase US$ -32.989 million (2013)[2]
Employees 1,637 (Dec 2013)[2]

Angie's List is a US-based, paid subscription supported website containing crowd-sourced reviews of local businesses.

For the quarter ended June 30, 2014, Angie's List reported total revenue of US $78,896,000 and a net loss of US $18,223,000.[6]


William S. Oesterle and Angie Hicks founded Angie's List in 1995. The idea resulted from Hicks's search for a reliable construction contractor in suburban Columbus, Ohio, on behalf of Oesterle, a venture capitalist who was Hicks's boss. Hicks moved to Columbus to join Oesterle in creating Columbus Neighbors, a call-in service and publication with reviews of local home and lawn care services. The name and concept were based on Unified Neighbors in Indianapolis, Indiana. Hicks went door-to-door, signing up consumers as members and collecting ratings of local contractors.

After Hicks recruited over 1,000 members in Columbus within one year, she turned to Oesterle to raise money from investors to develop the business.[7] In 1996, the company bought Unified Neighbors from its creator and moved the company's headquarters to Indianapolis.

By 1999, the database of local services and reviews was moved to the Internet. In the following years, the customer base and business relationships grew throughout the United States, while expanding coverage to include additional services, such as health care and auto care.

In 2013, Angie's List had over 70,000 subscribers. In August 2015, it reported 3.2 million paid members.[8] Despite this growth, Angie's List has never had a profitable year.[9]

Ratings methodology[edit]

Angie's List grades companies using a report-card-style scale, which ranges from A to F; these ratings are based on the following criteria: price, quality, responsiveness, punctuality and professionalism.[4] Each company has its own page, which is composed of a description of its business along with the customer reviews. The aggregate grade is drawn from the combined reviews and grades given to the businesses from the consumers.


Angie's List has been criticized for the fundamental contradiction between its claimed philosophy ("Companies can't pay to be on Angie's List") and the conflict of interest caused by reliance on advertising revenue for 70% of cash flow.[10] Answering a complaint from a user, David Segal found that when subscribers post a negative review of a company to Angie's List, a staff member discusses it with them in an attempt to rectify the situation. If the company is one that advertises with Angie's List, the negative review will be removed and then the customer must give an A or B grade. The company's effort to keep advertisers happy reveals their conflict of interest.[11]

The October 2013 issue of Consumer Reports Money Adviser reported:

"We think that the ability of A- and B-rated companies to buy their way to the top of the default search results skews the results. Cheryl Reed, a spokeswoman for the company, disagrees. 'We don’t believe that,' she says. But Angie’s List marketing materials intended for businesses say that companies that advertise get 'an advantage of increased exposure' that 'can propel you ahead of your competition.' They get 12 times more profile views than companies that don’t buy ads. Angie’s List encourages businesses to solicit reviews by giving customers free, postage-paid forms, stickers on thank you notes, and Web links embedded in e-mail invoices. But experts who study survey techniques say that can create a bias for positive reviews. Angie’s List misleads consumers by prominently promising that 'businesses don’t pay' and that it’s a consumer-driven service supported by membership fees. But almost 70 percent of the company’s revenues come from advertising purchased by the service providers being rated. Angie’s List tells consumers that it provides 'reviews you can trust,' and takes steps to detect and remove fraudulent positive and negative reviews. But company investment disclosures say that 'we cannot guarantee the accuracy of our reviews.' ” [12]

Competition is a major concern. Competitors such as Yelp offer similar reviews, with a much larger database, for free, causing concern for the future of ANGI's paid membership model. Angie's List reviews for home services are liable to be hundreds of miles away, and not local as advertised.[13]

Investors worry that the company has been in business for more than 18 years, yet never has shown an annual profit, and that valuations of the company are unrealistic based on the actual revenue the company produces.[14]


According to The Washington Post, in March 2007 SCS Contracting Group sued Angie's List and two members for libel because of negative reviews of the company. One of the sued members remarked, "if [contractors are] able to sue, then the value of Angie's List depreciates.... People aren't going to be willing to submit reviews if they could be threatened with a lawsuit."[15] On 7 October 2008, the plaintiffs dismissed the complaint against the two members. Summary judgment was later granted in favor of all defendants.[16]

In 2014, Angie's List Inc. paid $2.8 million to settle a lawsuit alleging that it automatically renewed members at a higher rate than they were led to believe.[17]

Financial information[edit]

Angie's List estimated that its annual revenue in 2008 was $58 million, generated primarily through advertising in its newsletter and membership fees.[18] In 2012, 69% of Angie’s List's revenue came from advertisers.[19]

Membership fees are based on volume of service providers at a given location. For example, Angie's List reported the following annual membership fees as of 4 December 2009:

In 2010, Angie's List raised a total of $25 million in capital from investors. In September 2010, Wasatch Funds and Battery Ventures invested $22 million.[20] In November 2010, Saints Capital led an additional funding of $2.5 million.[21]

On November 17, 2011, Angie's List began trading on the NASDAQ exchange under the ticker symbol ANGI. It priced 8.8M shares at $13 and opened for trading at $18, a 33% premium.[22]

Shares have remained below $13 since March 2014.[6]


  1. ^ McGowan, Dan (September 8, 2015). "Angie's List Hires CEO with Big Name Credentials". Inside Indiana Business. 
  2. ^ a b c d ANGIE’S LIST, INC. Form 10-K, Securities and Exchange Commission, February 28, 2014
  3. ^ "accessIndiana". Indiana Secretary of State. Retrieved 2006-11-07. 
  4. ^ a b Schein, Amy. "Brownstone Publishing, LLC". Hoovers. Retrieved 2007-01-30. 
  5. ^ Duros, Sally (2007-01-05). "Mining gold from Chicagoans' word of mouth". Chicago Sun Times. Archived from the original on 9 February 2007. Retrieved 2007-01-29. 
  6. ^ a b Public Record, NASDAQ
  7. ^ Evans, Teri (October 6, 2010). "No Free Stuff Here: At Angie's List, Members Pay". Wall Street Journal. Retrieved August 2, 2011. 
  8. ^ Kopytoff, Verne. "Angie's List names former Best Buy executive as CEO". Fortune Magazine. Retrieved 9 September 2015. 
  9. ^ Trainer, David (September 10, 2013). "Ain't It Time to Say Goodbye to Angie's List?". Forbes. 
  10. ^ David, Traynor (2013-09-10). "Ain't it Time to Say Goodbye to Angie's List". Forbes. Retrieved 2013-10-30. 
  11. ^ David Segal (December 21, 2013). "A Complaint Registered, Then Expunged". The New York Times. p. BU3. Retrieved 18 October 2014. 
  12. ^ [1][dead link]
  13. ^ Berr, Jonathan (2013-10-07). "Angie's List Doesnt Rate Well Shareholders". Investopedia. Retrieved 2013-10-30. 
  14. ^ "Angie's List: Worth $9 Based On Expected Lifetime Member Value In 2015". 26 October 2013. Retrieved 18 October 2014. 
  15. ^ Kelly, John (March 13, 2007). "Homeowner's Web Gripe Draws Contractor Lawsuit". Washington Post. 
  16. ^ "Stephen C. Sieber v. Brownstone Publishing Co." (PDF). October 2010. 
  17. ^ "Angie's List to pay $2.8M in membership-fee settlement". Retrieved 18 October 2014. 
  18. ^ Murphy, Tom (2007-01-20). "Angie's to-do list: doctors; Service ratings firm explores expansion into health care". Indiana Business Journal. Retrieved 2007-02-01. 
  19. ^ "Ain't It Time To Say Goodbye To Angie's List?". Forbes. 10 September 2013. Retrieved 18 October 2014. 
  20. ^ Merino, Faith (21 September 2010). "Angie's List strikes big with $22M". VatorNews. 
  21. ^ Merino, Faith (11 November 2010). "Angie's List raises $2.5M adding to $22.5M". VatorNews. 
  22. ^ "Angie's List gains 25% in IPO". CNN. 2011-11-17. 

External links[edit]