NEW YORK (The Deal) -- Angie's List (ANGI) - Get Report has caught the attention of an activist shareholder as it struggles with its turnaround efforts, and a sale may be the best option for the review site, according to industry observers.

New York-based hedge fund TCS Capital Management revealed a 5.4% stake in the Indianapolis-based consumer review site in a 13D filing with the Securities and Exchange Commission on Wednesday.

TCS said it plans to have conversations with the company, which has about a $274 million market capitalization, about exploring a potential sale, the company's operations and the pending selection of its next CEO, among other matters, adding that Angie's List has multiple options to increase its market value.

"They have a great brand name. They do have a good base of subscribers," said an industry source who asked for anonymity, speaking of Angie's List. "What they don't have is -- they don't have any technology, and marketing is not very good."

Founded in 1995, Angie's List is a subscription-based website that connects consumers to service providers across various industries including home improvement and healthcare by providing customer reviews.

Any acquirer would have to see that there are positives despite the company's declining business, the source explained, adding that competition has increased with Amazon.com (AMZN) - Get Report, Google (GOOGL) - Get Report and IAC/InterActiveCorp.'s (IACI) HomeAdvisor expanding their footprint in the local business review market.

The target's data would be key in a sale, the source said, adding that home improvement services provider HomeAdvisor could be a logical buyer of Angie's List, along with Home Depot (HD) - Get Report and Lowe's (LOW) - Get Report.

"It would have to be somebody big who can absorb the company and say, I don't really need your revenues,'" this person said.

This source pointed to IAC's history of spinoffs -- with the initial public offering of online dating assets, the Match Group, being the latest -- and said the Internet conglomerate could look at HomeAdvisor as its next candidate to split off. HomeAdvisor has turned itself around well, and having Angie's List would significantly beef up its offerings, this person added.

Still, Angie's List would be negotiating from a position of weakness in a sale, the source said, adding that it's a "buyer's market" for this type of Internet assets. In October, Angie's List was reportedly exploring a sale.

"Growth is slowing down pretty dramatically. If they can get one times revenue, that would be a good number," this source said of Angie's List. The Internet company is estimated to generate revenue of about $352 million in 2015 and $379.5 million in 2016, according to Bloomberg data.

One of the issues at the company is leadership -- co-founder and CEO William Oesterle stepped down in April. The company is currently conducting a search for a new chief executive.

"I think they will be very open to a sale. The CEO left. Their sales force is in turmoil," the source explained, adding that Angie's would likely jump at an opportunity to sell at the right price.

There is a pretty exhaustive list of potential buyers, agreed Elgin Thompson, managing director of digital media-focused boutique investment bank Digital Capital Advisors, also pointing to Groupon (GRPN) - Get Report, Priceline (PCLN) and Constant Contact (CTCT) as examples of strategics that would benefit from having a local media business like Angie's List.

"It's in a great market. There's been a lack of innovation and a lack of catalyst for growth," he said. "That's more execution than being a bad business."

But Thompson wondered whether a sale would take place near-term, as the target could continue internally improving its business and fetch a higher price later, or choose to stay independent.

"The credibility of management among investors is probably at an all-time low," added RBC Capital Markets analyst Rohit Kulkarni, explaining that though Angie's has not been able to grow the number of its subscribers, its brand name and relationships with advertisers will be appealing to financial sponsors and strategics.

On July 22, Angie's List posted second quarter results, reporting $87.3 million in revenue compared to $78.9 million from the corresponding period a year ago. It reported net loss of $8.3 million compared to $18.4 million the prior year.

Shares of the target jumped nearly 9% Thursday to $4.70 in midday trading. Shares are down about 24.5% year-to-date.

Officials with TCS Capital Management did not return requests for comment.

A spokeswoman declined to comment on last year's reports that the company was considering a sale, but said, in an e-mail, "We are focused on doing what's in the best interest of our shareholders, and right now, that is on executing our strategy to increase revenue, invest for growth and expand margin," she wrote.