Marketing push widens Angie's List's 2Q loss

AP News
Posted: Jul 25, 2012 6:57 PM

INDIANAPOLIS (AP) — Angie's List losses are still piling up as the company spends more to lure people to its online business-review service and persuade them to pay to see ratings on everything from plastic surgeons to sewer cleaners.

The company said Wednesday that it lost $23.4 million, or 41 cents, per share during the second quarter. That compares to a loss of $16.2 million, or 60 cents per share, during the same three-month period ending in June last year.

The larger per-share loss in last year's quarter reflects that the company had fewer shares outstanding before going public last November.

The setback in the most recent quarter was larger than analysts' average estimate calling for a loss of 38 cents per share, according to a FactSet survey.

Angie's List's revenue for the period climbed 74 percent from last year to $36.5 million. That was about $1 million above analysts' forecasts.

Investors seemed mildly pleased as the company's shares added 4 cents to rise to $14.59 in extended trading after the results came out. That leaves the stock with a modest gain from its initial public offering price of $13.

Yelp Inc., which operates free website for reviews of local businesses, has fared better since its stock went public at $15 in March. Its shares so far are up by about 40 percent from the IPO price.

Angie's List, which is based in Indianapolis, spent $27.6 million promoting its website and trying to sell its services. That was a 52 percent increase from its marketing expenses of $18.1 million during the same time last year.

Management has made it clear the company intends to continue to spend heavily in an attempt to establish its website as the Internet's most reliable place for consumer reviews of local businesses in more than 550 different categories. The company also is trying to convert more local merchants into advertisers on its site.

Angie's list requires visitors to subscribe to see its A to F ratings on businesses submitted by consumers. The annual fees range from $28.50 to $46.

Angie's List ended June with 1.43 million paying members, a gain of about 210,000 members since March. The company spent an average of $91 for each new member in the second quarter, an 11 percent increase from an average of $82 during the first three months of the year.

It expects its revenue for the current quarter to range $40.3 million to $41.3 million, slightly better than analysts had been predicting.