Angie's List, an online marketplace that inspired numerous IT service provider ecosystems, has confirmed layoff plans. Moreover, the company essentially is up for sale. It's a humbling reminder that building, maintaining and growing online marketplaces isn't for the faint of heart.
Angie's List executives hinted about the staff cuts and strategic business review during the company's Q3 earnings call earlier this week. Although the online marketplace remains huge, financial metrics are weakening. The company's Q3 revenue was $79.7 million, down considerably vs. $87.0 million in Q3 2015. Moreover, Angie's List had a net loss of $16.8 million in Q3, compared to net income of $0.1 million in Q3 2015.
Apparently referring to layoffs, CEO Scott Durchslag said: "We have identified an additional $15 million to $20 million of annualized cost efficiencies and reductions that we are executing in the fourth quarter, which builds on many of the efficiencies we've already implemented." A spokesperson for the company declined to disclose how many positions will be cut, and instead has referred media outlets back to the earnings call.
Angie's List: Company Up for Sale
During that call, Durchslag also hinted that a company sale also is under consideration. "We are focused on opportunities to further accelerate our growth," he said. "So, we have decided to explore strategic alternatives to optimize the potential and value of our new platform. Therefore, the board of directors has formed a strategic advisory committee to oversee this process." The effort includes hiring Allen & Co as well as Bank of America Merrill Lynch to assist the strategic review process, Durchslag added.
Still, the executive team insisted Angie's List is undergoing a successful turnaround -- leveraging a freemium strategy to more easily match customers with service providers that offer home repair, car repair and more. More than 3 million members leverage the platform to research, hire, rate and review local service providers.
Founded in 1995 by Angie Hicks, Angie's List is believed to have influenced IT service provider marketplaces like OnForce (launched in 2003). Hicks remains CMO of Angie's List, but Durchslag was hired in September 2015 to drive a company turnaround. He previously held executive-level ecommerce positions at Best Buy, Expedia and Skype.
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