Angie's List takes a hit

Dateline: Tue 19 Apr 2016

Home-grown consumer-review website Angie's List has lost a court fight to prevent three formerly employed top sales people from going to work for the competition, Home Advisor, which now has offices in Indianapolis and is based in Colorado.

Depending on your perspective, it sounds as if Angie is playing hard ball -- or is in desperation mode, trying to beat back Home Advisor, which has received job applications from more than 200 Angie's List employees.

The bigger picture is that Home Advisor has tried to acquire Angie's List in a merger in the past.  Home Advisor, called "an Internet behemoth" in Indianapolis Business Journal last November, tried to buy AL for $512 million, but the offer was rejected.

Then, last winter, three top AL salespeople jumped ship for Home Advisor, and ended up being sued by Angie's List.

Not a smart legal move on Angie's part.

The sales people --- and counsel Kathleen DeLaney -- prevailed in Hamilton Superior Court Friday, when a judge rejected Angie's List's request for a court order to stop the three from working at Home Advisor. 

"The court found that "'Angie's List is not likely to succeed on the merits of its claims...that Angie's List has not established that it will suffer irreparable harm," and that....the public interest favored the former employees, and not Angie's List,'" says a statement from DeLaney & DeLaney LLC., quoting the court ruling.

I can't imagine what counsel for AL was thinking, since the three employees had not even signed non-compete agreements, which generally have a tough time standing up to a court test anyhow.

Again, the bigger picture: readers of this blog may care about this news because many former Indianapolis Newspaper Inc. people (Indy Star and Indy News) have found a soft landing at Angie's List.

But then, as Forbes pointed out three years ago, the Angie's List model is broken. Who needs to pay for a site that provides consumer information which is readily available for free on Yelp, etc.?

Furthermore, argued Forbes, Angie's List, by following a tired template, is playing its investors for fools. The ultimate insult: the more a business pays in advertising revenue to Angie's List, the higher its ratings, according to Forbes.

Full disclosure: I am an Angie's List subscriber. 

But then I subscribe to Indy Star, too. Nothing wrong with loyalty. Up to a point.

Angie's List was, at the very least, heavy handed in its efforts to block three top-notch sales persons from earning a living. From here, it looks like desperation and not smart play.

You can read more about this story in Indianapolis Business Journal. 

Comments

Rita Rose [unverified] said:

AL took down its paywall several weeks ago, ramping up the competition

2016-04-19 09:40:29

Steve Russo [unverified] said:

How Angie's List continues to exist baffles me. Why they wouldn't sell out NOW to anyone willing to pay for an out-of-date and never profitable company befuddles me. Definitely desperate times at AI...

2016-04-19 09:55:54

Molly Butters Hale [unverified] said:

If Angie's model is so unsuccessful, competitors wouldn't be recruiting staff or stealing trade secrets, a la Amazon. This kind of lawsuit is pretty par for the course in the tech field. Gotta try to protect your turf every time, or lose ground every time someone grabs for it. Apple sues aggressively and it's not viewed as a move of desperation, it's doing business.

I'm a tech start-up junky and spouse to an AL employee.

2016-04-20 12:17:53

hendy [Member] said:

AL made many enemies on its way up. Its enemies will gnaw on it, on its way down.

What was once Unified Neighbors had its window of opportunity. When organizations sell a weak business model to the public as shares, they need to either evolve rapidly and entrench success, or suffer from plentiful competition and better competitive brains. There are many better brains out there.

2016-04-20 20:02:21

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