The merger might not be as good for Home Service Providers as you might think

On Monday this week, it was announced that IAC (parent company of HomeAdvisor, Tinder, Match, and other websites) purchased Angie’s List for $500 million. More importantly for home contractors, it was announced that, as part of this deal, both HomeAdvisor and Angie’s List would merge together to create one larger entity.

While Wall Street seems to be happy with the deal as both IAC and Angie’s List stocks are up on the news, we dug further to find out what this means for the home contractors and home service providers that are already using the service.

The Good

Let’s start off with what is good about the deal.

As it relates to both websites, the merger seems to be a good thing for consumers because some of the technology and the process of finding contractors will be made easier on Angie’s List. At the same time, the branding and name of Angie’s List potentially could help HomeAdvisor get its name out as well. What IAC is counting on is that this will result in more users to both sites as well as a more streamlined user experience – which, in turn, will benefit its contractors with the potential for more jobs and customers.

While there are no guarantees, it will be interesting to see how both the HomeAdvisor and Angie’s List models come together to help consumers communicate more effectively with home service providers.

The Bad

So, if you are using either or both platforms now, this merger might seem like a great thing! More customers and clients never hurt anyone. When taking a look at the slide deck on the merger, however, it becomes clear that IAC has one thing in mind—monetization!

You can view the full presentation here.

So what does this mean? Essentially, IAC wants the “take rate” (the amount it gets from each transaction) to grow on par with take rates across other verticals.

Instead of charging home contractors 3 to 4 percent of each job, they are eyeing to increase it to something even higher. It has not yet been announced by what amount or when, but this is the main reason why people on Wall Street are excited about the merger.

What Now?

If you are a customer of either platform, then there isn’t much you can do except wait and see what will happen. Because it is so early, our guess is that nothing will change for the next 6 months or more.