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

Stocks in this article: ANGI YHOO GOOG AMZN GRPN YELP

"You're gambling because you're taking opinions from people that don't know enough to really know if what they think is good is really good. In some areas they can be correct," like customer service, billing, friendly workers, etc., but when it comes to skilled technicians, it's too subjective, Vaden says.

"The value proposition we offer to both consumers and local service providers strengthens our position as a trusted resource and allows us to derive revenue from both members and service providers," Angie's List says in the SEC filing. "As more members contribute reviews to our service, we increase the breadth and depth of content offered to members, attracting more members and enhancing the value of our service to reputable local service providers, for whom our members constitute a large pool of qualified customers for their services."

"My experience of knowing some companies on Angie's List -- some of them I'm on good terms with -- and based on my knowledge and technical expertise I could see it having a lot of risk to the customer," he says. Vaden does not pay Angie's List any fees.

This could also be true in terms of reviewers who may hold a grudge.

Vaden says this happened to him. While most of his reviews are positive on the site, he received an "F" rating from a customer who he had some initial conversations with, but in the end with whom he did not do business.

According to Vaden the customer wanted a landscaping estimate from him, but when she told him she was getting estimates from other landscapers, he wanted to ensure his competitors were in fact state-licensed landscapers. Vaden said that rubbed the customer the wrong way and they parted ways. The woman ended up writing a poor review of Vaden's company and submitted excerpts of their emailed conversation to prove her point. Vaden responded with the rest of the email to prove his case.

Vaden says because of that review his rating has been lowered.

Situations similar to Vaden's Angie's List frustration can be found at websites like The Pissed Consumer, which lets consumers vent about poor customer experiences.

Other small businesses say while they have indeed completed profiles on Angie's List, the extra business has yet to be seen.

Dianne Jaramillo, who is responsible for marketing at Another Perfect Pool, a swimming pool service and repair service company located in Mission Viejo, Calif., says she keeps tabs on the company's profile and reviews for the potential clients it can bring in. That being said, the company has had only a few calls from interested members. Another Perfect Pool has not received any poor reviews from Angie's List members, according to Jamarillo.

Cindy Donaldson, the director of Marketing and Sales of Founders Insurance Group in Torrington, Conn., says she completed a profile of her company a year ago for similar reasons to Jamarillo.

"For the insurance industry, I'm not really sure that it's the place where people are going to look for insurance. It's much better for contractors, plumbers -- that kind of thing," Donaldson says. "For us it's the fear of not being on it. I want to make sure that if somebody is going to make a comment on there .. it's the best perception of who we really are."

So far Donaldson hasn't had anything to worry about. The company hasn't received any comments, but there may be a reason: They haven't had business from Angie's List as far as she knows.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to:

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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