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Monday, August 28, 2006 - Page updated at 12:00 AM

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Angie's List earns an "A" for filling consumer niche

San Jose Mercury News

SAN JOSE, Calif. — When Tom and Jennifer Jackson bought their first home in San Jose two years ago, they faced myriad home repairs and no idea whom to call for help.

Then Jennifer Jackson 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.

Angie's List, created more than a decade ago in Columbus, Ohio, 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, including Seattle (8,000 members), at the end of last year.

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

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

"These things have been around since the beginning, but the reliance and usage has kicked in 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 walked 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. Once signed on, members use the site to review service contractors and post their opinions.

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Contractors get a grade of "A," "B," "C," "D" or "F," as if in school, 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.

Angie's List earned more than $9 million in revenue last year and projects $14 million this year. The company recently secured $6 million in financing from San Francisco's BV Capital to expand nationally.

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.

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 not happy with a service they found on the site.

Copyright © 2006 The Seattle Times Company

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