Tag Archives: ServiceMagic

Chris Terrill Discusses ServiceMagic’s Rebranding to ‘Home Advisor’

A few years ago, it became apparent that IAC’s ServiceMagic had stalled. While the 1,200 person company has continued to show growth, and had expanded to several international markets, it was clearly vulnerable to new challengers, ranging from Angie’s List and Yelp to new companies, such as Repair.com and RedBeacon (now owned by Home Depot.)

Part of the problem may have been that its assortment of services didn’t reflect how people look for service information. Part of it may have been that after 12 years, it was a tired brand to those in the industry, and unknown to those outside of it.

Now the company has pushed the reset button under the leadership of Chris Terrill, who’d served executive stints at Nutrisystem, Blockbuster and Match.com. Terrill’s been on board for 18 months now, and has extensively studied what he has determined is a “half billion dollar plus opportunity.”

“It’s about more than improvements and home projects,” says Terrill. “It’s all things in the service space.” Looking at the competition, Terrill sees a lot of potential to carve out a unique role for Home Advisor. “There is no go-to, ‘Trip Advisor’-like brand in the homes space,” he notes.

Rebranding is key to much of the company’s next steps. Home Advisor, the name of Microsoft’s real estate portal, was purchased from Microsoft for “less than six figures,” says Terrill. “It was the deal of the century.” The new name does a lot more for the company than the limited idea of “service” and the generic “magic,” he notes. Terrill adds that a major branding campaign, including TV, kicks off in January.

“We didn’t want to stop at the name change,” Terrill emphasizes. “We have completely changed the user experience.” New elements include a project cost guide, which users can use to project the actual cost for projects right down to local zip codes. Another new feature is Home911, which is an emergency service app. There is also content for home remodeling. Users can research it to “get beyond aspirational,” says Terrill.

What isn’t changing very much is the business model, although Terrill says it continues to evolve. There are basically two options. Consumers will still receive several qualified paid leads when they are looking for work. Different pricing is in effect for the standard lead or leads from Home911. What won’t change is that consumers will receive services for free. The company’s surveys showed that 90 percent of consumers would never pay for service information.

Angie’s List Raises $22.5 Million; Sees IPO Within 18 Months

Angie’s List, the premium ratings and review service for home and medical services, has announced that it has raised $22.5 Million from institutional investors as it prepares for an IPO within 18 months. Investors in this round include some public funds managers, including Wasatch Funds. The company previously raised $48 million, making for a grand total of $70.5 million raised. Battery Ventures remains the lead investor.

The Indianapolis-based service charges members anywhere from $10 to $67 per year for access to its ratings and reviews. The service reports over one million members, which probably translates into at least half a million paid and trial accounts, since there are typically two members per account.

Current revenues are not disclosed. But in 2008, roughly half of Angie’s List’s $50 million in revenues had come from membership and set up fees. The other half had come from advertising from reviewed companies that are highly rated (“B” and above) as well as national companies, such as appliance makers and retailers. Advertising can be found on the website as well as in a printed, monthly magazine that is well read by members.

Angie’s List has grown its mission considerably in the past couple of years. It has raised its profile with aggressive television, radio and print advertising, and added medical reviews, which it has intended to eventually break out as a separate, paid service. It has also added national services, for categories such as custom car restoration – it takes its Indianapolis roots seriously– and recently unveiled The Angie’s List Big Deal, a group buying effort that is now in 30 local markets and will be in 50+ markets by year end.

The big question marks for Angie’s List are whether it can simultaneously sustain its growth in the face of free competitors, such as Yelp, ServiceMagic and others; get beyond its older, home owner demographic; successfully extend its service to the new categories, and others; and maintain its friendly, home-spun “community” image.

Redbeacon Raises $7.4 Million; Interview with CEO Ethan Anderson

Redbeacon, the six person San Francisco based service referral company, announced today that it has raised a heady $7.4 million in Series A financing from Mayfield Fund and Venrock. CEO and Co-founder Ethan Anderson tells us that the company needed such a huge round to quickly ramp up the staff, including engineers, designers and marketing people; aggressively expand markets beyond San Francisco (although no markets have been finalized); and build a wide range of business partnerships.

Anderson notes that demographics and population size will play a large role in determining its next markets, but that business “distribution partnerships” will also play a role. For instance, Redbeacon is currently testing with BT in the U.K.

Partnerships, however, will consist of all shapes and sizes, including communities, search engines, media sites. The commission basis for job leads will “monetize better than advertising,” predicts Anderson. It will also feel like a natural, value added feature of their sites Partners “will drive tons and tons of traffic,” he says. “They’ll be moving to value added transactions to users.” The site currently works with BigTent, the women’s group site. It also works with several companies that remain unannounced.

Partnerships are being extended to individual SMBs, who can be partners by plugging a Redbeacon widget into their site. They can emphasize specific service categories and service providers among the leads that are carried, and receive a piece of Redbeacon’s 10 percent commission for jobs. A plumber, for instance, could provide a link to dry wall repair. “It is very contextual,” says Anderson.

Anderson adds that the site’s big challenge right now is not so much online competitors such as ServiceMagic, QuinStreet and others, but “changing consumer behavior,” as people are still used to picking up the phone. The social aspects of the site should help along these lines, especially the solicitation of consumer reviews, which complement reviews imported from Yelp, Google and Yahoo. Anderson notes that 50% of consumers who use the service for a job are providing reviews.

As for learnings from the site’s launch in San Francisco, Anderson says that the site is now up to 4,000 small businesses and service pros, and “is always getting more. It is almost enough to make the service work” with price quotes on every job, he says. “People are getting price quotes from very good providers.”

Thumbtack, a Service Leads Provider, Raises $1.2 Million

Thumbtack, one of the new breed of service lead companies such as Alikelist, Red Beacon, HelpHive and others seeking to push aside leaders such as ServiceMagic and Angie’s List (and the Yellow Pages), announced today it has raised $1.2 million, and now has raised a war-chest of $1.7 million altogether. The new angel round includes 11 angels, including well known Web leaders such as Jason Calacanis (WebBlogs), Joshua Schachter (Delicious), Scott Banister (PayPal), and Ariel Poler (i/Pro).

Site founder Marco Zappacosta says the funding will be used to expand Thumbtack’s eight person team, which is based in San Francisco. It will also be used to expand key features such as email marketing, appointment management and its “Personal Concierge” service.

Zappacosta tells us that the site has evolved considerably from its earliest days. It is now focused on simple tasks such as invoicing, record management and appointment management. “Payment solutions are really hard to pull off,” he says.

The company remains wedded, however, to its core concept of providing “deeper, richer” background on service providers rather than relying on licensed lists. It now has profiles on 40,000 service professionals in 11 markets, including Atlanta, Chicago, Dallas, Las Vegas, Los Angeles, Miami, New York, Phoenix, San Francisco, Seattle and Washington D.C.

ServiceMagic Sees 21% Growth in Providers

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.

AlikeList, a New Local/Social Platform, Raises $5 million and Launches

This has been the year for new sites that combine service directories and social features such as ratings and reviews. Earlier this year, we’ve seen sites such as RedBeacon, HelpHive, and others launch. Depending on definitions, earlier entrants include Citysearch, Yelp.com, Tree.com’s DoneRight, FixR , LocalPrice, InsiderPages and Centerd.

Behind their fancy Web 2.0 veneers, they are all going after an SMB leads market that has previously been defined — and is still being defined — by ServiceMagic, Angie’s List and the Yellow Pages.

Now along comes AlikeList, a new contender backed with $5 million from Syncom Venture Partners. As the name implies, the 15 person company enables people to save their local business recommendations and share them with friends via Facebook, and eventually, other platforms. It also plans to bring together local groups such as Home Owners Associations and PTAs. At the same time, it has an “all members” section that goes broader for Yelp-like recommendations from the general community.

This new service efficiently connects all the dots of Web 2.0 marketing. In a single dashboard, it provides reputation management services, and provides full reporting on website clicks. If services have 20 or more listers, they can create instant direct marketing packages, with coupons, updates, etc. On the business side, businesses will pay on a monthly basis for membership, and a per contact basis for jobs they receive.

What we see is it all seems well executed, especially with its highly usable map features (one of its execs is a former MapQuester). But frankly, all of the new entrants look good.

Earlier Facebook-oriented services such as Loladex couldn’t get the traction they needed, and were ghettoized by relying too heavily on Facebook. But AlikeList’s timing ought to be better in terms of technology adoption, plus it has more money. In coming months, we’ll be studying this one closely to see whether it will stand out.

HelpHive, a Referral Site, Seeks to Rope in SMBs with Free Video

Smelling blood at the presumed decline of Yellow Pages, a number of sites have launched that provide leads to local service SMBs. You got Angie’s List on the membership side. And ServiceMagic, Tree.com’s DoneRight, Sears’ ServiceLive and a number of regional companies (i.e. RedBeacon, Fixr, LocalPrice) using some type of leads model.

Now add HelpHive. Launched this summer in Seattle by four tech vets, HelpHive builds on licensed listings from iBegin to provide a “hand curated” directory of SMBs in 50 categories. Its business model is to charge SMBs an annual fee of $199 for a variety of “Pro” level services (introductory priced at $99) and five percent of the total job value. When leads don’t result in jobs, the service takes a $5 fee from the SMB.

It is interesting to note that the commission is half of ServiceLive’s 10 percent fee. Also in contrast to ServiceLive, all payments are done on an honor system. ServiceLive has a complex system – perhaps necessary — of collecting payments and distributing funds only after consumers are satisfied

HelpHive’s Pro service has a number of distinctive features, most notably one year of a basic, free TurnHere video, including a site visit by a videographer, and a 60 second clip. As with many other video offers, however, the video is not portable to other sites.

Citysearch had also provided introductory free video at one point. But those contracts were many times more expensive than what HelpHive is charging.

Co-Founder Karim Meghji says that the team considered the full range of business models currently offered in the space. At Real Networks, where two staff members worked, “we ran a subscription business,” he noted. “You’ve got problems with churn, lifetime value of customers, and customer acquisition costs. It will be a challenge for Angie’s List to sustain that.” Subscriptions also run counter to the company’s hopes of providing information “to the broadest base,” he says.

As for a leads based model akin to ServiceMagic, where SMBs are charged for leads whether they win the job or not, that doesn’t work either. “Consumers are seeking a service model, not an RFP-like model,” says Meghji .

The company launches its promotion this week with a $10 gift card to consumers that register to provide reviews. It is also appearing at a Seattle home show.