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Angie's List: Is It Good for Small Businesses?

NEW YORK (MainStreet) -- The notion that the reputation of a business relies on customer reviews can sometimes end up causing more harm than good. In the case of Angie's List (ANGI), this marketing catch-22 presents a difficult choice for small service providers wondering if they should profile their company on the online review service.

Angie's List caters primarily to small businesses in the home repair/home renovation, auto and health professional industries. The premise is that businesses can be reviewed and rated on an "A" to "F" scale by customers at the local level.

It's up to business owners to decide whether being on a list that uses customer reviews to rate companies is the right one for them. In fact, while Angie's List is founded on reviews as a source of trust, a quick review of blog posts and tweets from users and commentators about the service is likely to raise as many questions as answers for the small business owner.

Online review service Angie's List is getting some mixed reviews itself.

Angie's List is currently available in 186 markets in the U.S. It plans to add more in the foreseeable future. The company has been around for 17 years, but it just went public in November.

To be sure, Angie's List has facilitated many positive experiences for members and listed businesses.

Yet some small businesses say the service isn't really worth it. These companies say either they don't get enough leads from the site or they don't trust the review process (even though Angie's List bases itself on providing quality reviews).

On the consumer side, the jury is still out on whether customers understand the business model and, frankly, whether they should trust such subjective comments from others.

For Angie's List, members (consumers) pay a fee for the right to rate service providers and access other members reviews on the website. Members can only write one review per service transaction. Non-members can also write reviews (but have limited access to the site). The site will not accept anonymous comments. Angie's List boasts that it has roughly 1.2 million memberships as of March 31, up more than 80% from a year earlier.

Businesses do not pay to be on Angie's List. Accounts can be created for free on the website, but the company does require an authorized user to be listed as a contact. The more positive reviews a business gets, the higher they will place in a member's search.

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