Tag Archives: iac

Millennials Prompt Angie’s List To Tear Down Paywalls, Go Free: CEO

Online reviews site Angie’s List ( ANGI ) said Thursday that it will drop its current membership model this year and replace it with free access to its business ratings and reviews as part of a tiered subscription plan. The company promised changes last fall after it turned down a $512 million acquisition offer  from IAC/InterActiveCorp ( IAC ) subsidiary HomeAdvisor. Angie’s List is trying to grow its presence in the $400 billion home services market. Indianapolis-based Angie’s List has struggled with competition from rivals including Yelp ( YELP ), search engines such as  Alphabet ’s ( GOOGL ) Google and others. The company announced changes and 2016 year guidance at its annual analyst meeting Thursday in New York. Angie’s List stock was up nearly 4% in afternoon trading on the stock market today , near 9. Angie’s List stock is up 28% in the past 12 months but down nearly 70% from its all-time high of 28.32, brushed in July 2013. “The new plan announced today transforms our legacy business model to bring in a new era of growth and profitability,” Angie’s List CEO Scott Durchslag said in a statement. “By removing the paywall for ratings and reviews, our new profitable-growth plan removes the barrier that has limited our growth and enables Angie’s List to engage with more consumers and more service providers than ever before.” He said, “We expect to reignite revenue growth and drive significant increases in profitability over time with minimal disruption to the business.” The new tiers — to launch this summer — include a free option where users can research ratings of local businesses, read reviews and see display advertising. Premium silver ($24.99) and gold ($99.99) annual subscriptions include options such as an emergency service hotline and fair price guarantees. “The reviews paywall served the company well for the last 20 years, but looking ahead to the next 20 years — millennials are not going to pay for reviews,” Durchslag told USA TODAY on Thursday. Angie’s List guided 2016 revenue at $345 million to $355 million, up 0.25%-3.00% year over year. That’s short of the $361.5 million analysts polled by Thomson Reuters had modeled. “There will be some trade-off in terms of consumers that will want to just get things for free as opposed to paying a subscription,” says Durchslag. “There will be others that want the new set of offers we’re launching.”    

Yahoo Sets Panel To Seek Deals; Verizon Says No To ‘Falling Knife’

Yahoo ’s ( YHOO ) board on Friday formed a committee of independent directors to entertain offers for its core Internet business, if they come. One of the prospective buyers , Verizon Communications ( VZ ), this week said it does not want to “catch a falling knife,” referring to the state of Yahoo’s business. Private equity firms are said to be interested in Yahoo, but   IAC/InterActiveCorp ( IAC ) has signaled it’s not in the running. Aside from forming a committee of independent directors to explore possible transactions, Yahoo on Friday announced that it will bring in Goldman Sachs, JPMorgan and PJT Partners as financial advisors, along with law firm Cravath, Swaine & Moore. Yahoo stock was up 2.5% in midday trading in the stock market today , near 30. Bloomberg reported earlier this week that activist investor Starboard Value, which has been pushing for changes, could wage a proxy fight at Yahoo. Yahoo dropped plans last year to spin off its stake in Alibaba Group ( BABA ). Executives have said they might create a separate company that would house Yahoo’s Internet business and its stake in Yahoo Japan, but a lot of options appear to be on the board for the struggling Internet company. Verizon has talked up its interest in buying some Yahoo assets “at the right price.” Verizon last June acquired AOL for $4.4 billion, including about $300 million in AOL debt. AOL’s Internet business had been improving, while Yahoo’s display advertising growth has slowed, but Yahoo has been focusing on mobile and other growth areas. UBS telecom analyst John Hodulik, in a research report Thursday, said Verizon seems in no rush, based on a meeting with AOL’s chief executive, Tim Armstrong. Armstrong told UBS that Verizon would need more information on the state of Yahoo’s business under due diligence, according to Hodulik’s report. “They’d have to start a process, share all the data regarding audience, distribution, monetization and talent,” Armstrong told UBS. “Everything at this point is theoretical. Assets with rapidly a growing number of users are very expensive. Even those with a stable number of users are expensive. That said, you don’t want to catch a falling knife. Hard to know until we get a look.”

Dating Site Match Group Plunges On Mixed Earnings

Dating conglomerate Match Group ( MTCH ) stock tumbled intraday Thursday after mixed Q4 results Wednesday afternoon. The company missed revenue expectations but beat what Wall Street estimated for earnings. The company reported revenue of $268 million, up 12% from the year-earlier quarter but below the $277 million that analysts had predicted. The company’s earnings per share ex items came in at 24 cents, above the 20 cents that analysts polled by Thomson Reuters had estimated and down 25% from a year earlier. Match Group stock plummeted 11% to about 9.50 in the stock market today , dipping as low as 8.75 in the morning. The company has an IBD Composite Rating of 55, where 99 is the highest. These results represent the first time that Match Group has reported since the  InterActiveCorp ( IAC ) unit’s November IPO . UBS analyst Eric Sheridan wrote in a research note Thursday that “noise in the initial EPS report should confuse” from the firm’s long-term growth and value proposition for investors. He called Match Group executives “disciplined” in their investment approach and growth in the long run. In terms of the stock price, Sheridan said, “We think investors are already pricing in single-digit revenue growth,” adding that investors believe margins won’t improve in the future. But, Sheridan says, since the stock sits 20% above his worst-case scenario, with 70% upside to his price target of 18, the stock currently offers a compelling risk vs. reward scenario for investors. In prepared remarks on the company’s earnings call with analysts, Match Group executives said that the company expects dating revenue growth of between 5% and 7% in each quarter of 2016. Executives expect non-dating revenue to grow by “high single digits” in Q1, compared with the year-earlier quarter, and in the mid-double digits for the full year. Guidance implies 2016 dating revenue of $1.12 billion, up 22%, according to a Thursday research note from Cowen analyst John Blackledge.