Angie's List Has (Another) Serious Problem

Angie's List Has (Another) Serious Problem

Investors hoping for a recovery in Angie's List may be in for a disappointment, Fool contributor Tim Beyers says in the following video.

What's the problem now? eBay . After a successful trial run in the United Kingdom, the auctioneer has decided to launch "eBay Hire" here in the U.S. Like Angie's List, the service is designed to put shoppers together with local service providers who list their services, bio, and rates.

eBay doesn't plan to charge for "Hire" in the first few months of the life of the service, TechCrunch reports. That should change once there are enough service providers and consumers tapping the service, at which point eBay plans to levy a transaction fee similar to what users pay when auctioning products in the online marketplace.

Can Angie's List endure the assault? Tim cites two reasons to be pessimistic. First, eBay already serves hundreds of millions of registered users versus just 2 million Angie's List members. Newbies with a need to find a reputable contractor are more likely to try eBay. Second, Angie's List is already cutting prices in what looks like a response to stiff competition. There's no evidence the company enjoys a sustainable competitive advantage, Tim argues.

Do you agree? Are you willing to give Angie's List the benefit of the doubt? Please watch the video to get Tim's full take and then leave a comment to let us know where you stand.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends and owns shares of eBay. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published