IAC’s ServiceMagic reported today that it saw a 51 percent boost in 4Q revenue, growing from $25.3 million in 2008 to $38.2 million in 2009. The boost was accompanied by a 21 percent growth in the number of home and trade providers that pay for its leads; and a 46 percent gain in service requests. The addition of revenues from two new units –ServiceMagic International and Market Hardware, a search and website provider for verticals –also increased the pot.
Profits, however, were low at $1.2 million. They were held down by increased marketing efforts, including an expanded sales force and a major advertising campaign. Losses caused by the rapid expansion of the company’s international unit also held profits down.
ServiceMagic CEO Craig Smith is keynoting at Marketplaces 2010 March 22-24 in San Diego.
I think Service Magic has set the stage for creating a whole host of niche providers. If these niche providers can promote their service with added value incentives, then they can attract more attention and reduce the costs associated with marketing the service. Service Magic provides the proof/legitimacy and sets the price point for other lead providers to educate a new generation of small business owners.