Internet giant Amazon announced Monday that it's expanding its home services offerings to 20 new markets including Indianapolis, intensifying the competitive landscape for locally based Angie's List Inc.
Amazon Home Services debuted last year and allows people ordering products through Amazon's website to book a contractor to install or mount those items—for example, a sink, gameroom table or bedroom suite—as part of its checkout process. Like Angie's List, it also is offerring to connect consumers to independent firms for common services such as home improvement, automotive repair and yard work.
The expansion now brings Amazon's home services footprint to 50 U.S. cities. Angie's List currenty operates in 253.
"We're thrilled to be offering more Amazon customers access to our network of trusted pros throughout the U.S.," Nish Lathia, general manager of Amazon Home Services, said Monday in a press release.
Although Amazon is a behemoth in Internet retail, its professional services network likely pales in comparison to that of Angie's List, which had a 20-year head start and now counts nearly 56,000 service professionals in more than 700 service categories.
"The home services space is a $400 billion marketplace, so it’s not surprising that more companies are trying to get into it," Angie's List spokeswoman Cheryl Reed said in an email on Monday.
"We're laser-focused on delivering the best service we can to our members—giving them high quality and fair prices and ensuring they can easily connect to the best local service companies and remove some of the stress of home maintenance and improvement. We’re better positioned than most to actually deliver—and even expand—on that."
Kerry Rice, a Needham & Co. analyst who covers Angie’s List, said he doesn't think Amazon’s expansion entails much competitive risk, even though it might drive headlines.
“Amazon has been offering home services for probably 12 months. I view Amazon’s offering primarily as a way for the company to sell more goods, like TVs,” Rice said. “You are probably not going to Amazon to find a plumber."
Amazon, Google and even Facebook have made clear their intentions in recent years to invade the home services space and connect consumers and service professionals. Angie's List executives have said they are paying attention, but that the new competition has not had a material impact on the company's business.
"In terms of the competitive landscape, it is intensifying and that's a good validation of the attractiveness of the space," Chief Financial Officer Tom Fox said during the company's first-quarter earnings call in April. "And even though it is intensifying, … we still don't see that impacting us adversely in terms of where our consumers or service providers are going. We watch it really, really closely."
Angie’s List filed a federal lawsuit last year against Amazon, charging the company stole service-provider lists and other proprietary information in its quest to build a direct competitor. They settled the suit in March of this year.
Angie's List is undergoing a turnaround that included ditching is "paying members only" subscriber model in favor of a freemium model in June. Members can payfor premium features including fair price guarantees, but basic services are free.
Its rationale is to rapidly grow its 4.5 million-member user base so that service providers would be more inclined to advertise on the platform. Service provider revenue growth has been tepid in recent quarters, and the company has been under pressure to accelerate revenue growth.
Earlier this month, CEO Scott Durchslag announced that the company was pursuing strategic alternatives. That could include a sale, but could also include other partnerships or investments that could help the company speed up its turnaround efforts.