Angie’s List expands to Bay Area

Angie's List expands to Bay Area

REFERRAL FIRM SECURES FUNDING FROM S.F.'S BV CAPITAL

By Sarah Jane Tribble
Gary Reyes / Mercury News
Angie's List started in 1995 when Angie Hicks teamed up with a friend who'd bought an old home.

When Tom and Jennifer Jackson bought their first home in San Jose two years ago, they found themselves faced with myriad home repairs and no idea who to call for help.

With friends who were also new homeowners and no family nearby, they had a tough time finding reliable recommendations. Then Jennifer spotted an advertisement for Angie's List, a referral Web site sweeping the country.

From pet-sitting to roof repair, site members grade local companies and write comments about specific services. The Jacksons found someone to fix their gaping gutters and have returned to the site again and again.

“It made sense and it was like I can't believe there wasn't one before,'' she said.

Angie's List, created more than a decade ago in Columbus, Ohio, launched in the Bay Area in January and has quickly picked up 19,000 members. The private company says it has more than 450,000 members and wants to expand to 68 cities this year, up from 245,000 members in 27 cities at the end of last year, thanks to an aggressive expansion campaign.

The Web site is yet another example of the growing world of online social communities, including sites in the Bay Area such as YouTube and craigslist. Online analyst Greg Sterling believes the strong traction such sites are experiencing shows that the Internet is evolving from its traditional form as an information portal into a fixed part of our daily social lives.

While a flood of social sites spew opinions, many people are looking for signs that what they see is trustworthy, said Sterling, the founder of Oakland-based Sterling Market Intelligence.

“These things have been around since the beginning, but the reliance and usage has kicked in a big way,'' Sterling said.

Angie's List started in 1995 when Angie Hicks teamed up with friend Bill Oesterle, who had just bought an old home, to figure out how referrals could become a business. Hicks began by walking door to door, asking neighbors to give referrals to various services, which they used to build their fledgling company.

Soon, the company had a call-in service, added a newsletter and eventually tapped into the Internet.

Members pay a monthly subscription fee of about $6 to access the site. (The list was offered free in the Bay Area during the past few months to draw members). Once signed on, members use the site to review service contractors and post their opinions.

Contractors get a grade of A, B, C, D and F, as if in school, and then a report card is given that ranks the company's price, quality, responsiveness, punctuality and professionalism. Members can also write a short synopsis of the service they received.

“Probably 90 percent of our activity happens on the Web,'' said Hicks, who is now the company's marketing director. “It's just a natural fit for online. People like to read the experiences. I had a water heater a few years back and I had no idea how much that was going to cost, and I found out before my first phone call it would cost around $400.''

Angie's List, no longer a start-up, earned more $9 million in revenue last year and projects $14 million this year. Most users are homeowners, though Hicks is careful to point out that the site offers something for everyone, including auto repair.

The company recently secured $6 million in financing from San Francisco's BV Capital to expand nationally and will open in 68 new markets this year, including New York, Baltimore, Denver and Las Vegas. Eventually, the company plans to go international.

Protecting the site's integrity and ensuring what's posted is legitimate will be key in expanding the Angie's List brand, Hicks said.

Members are not allowed to post reports anonymously, and Angie's List employees check to make sure companies aren't posting comments about themselves. In addition, Angie's List only accepts advertising from companies that have an overall B rating or higher on the site and also offers a complaint resolution service to help members who are not happy with a service they found on the site.

For Howard Mora, whose Fremont pet-sitting service, the Animal Nanny, was reviewed on the site, Angie's List seems like a reliable form of word-of-mouth advertising.

“The sort of businesses you see on Angie's List are very trust-oriented,'' said Mora, whose business has one report with an A rating. “You're committing a lot to them either financially or emotionally . . . because you have to pay to use it means the people who use it will be more committed.''

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