Raed Malhas founded MiNeeds.com in late 2007 and launched the website in the summer of 2008. With the site, he created a platform that allows consumers to post jobs they need to get done — and contractors then bid for the work.
So with the recent IPOs of Angie’s List (NASDAQ:ANGI) — which provides reviews for local service providers — and daily deals website Groupon (NASDAQ:GRPN), I thought it would be interesting to get his views on these companies, as well as the industry trends. Here’s a few things Malhas had to say:
Angie’s List
“Angies List has an interesting model today because they are still able to convince consumers to pay to read reviews of local professionals even when there are a plethora of free websites. My gut says that the major increase in marketing spend in 2011 is driven by their knowledge that the model has a short life.
“From another perspective, Angie’s List has around 800,000 local professionals on its site. Yet the consumers have very little interaction with their professionals.
“But Angie’s List is in a prime position now with the abundant cash they received from their IPO. What they do now with this money is crucial and will decide their destiny over the next few years. Innovation is a must for their survival; expensive advertising will only serve them in the short run.”
Groupon
“Groupon did a phenomenal job capitalizing on a psychological consumer behavior by offering deals available only that day. Consumers could not resist the urge not to buy instantly in fear they might miss the day’s deal. Today, however, there are close to 1,000 clones of Groupon.
“So consumer behavior will most probably switch into being picky on where to spend their daily deal dollars, and will scan multiple offers from multiple companies like Groupon before they purchase a deal.
“The daily deals market might have a similar destiny to the dating sites market, where there will only be a handful of eHarmonys and Matches, and the rest will focus on tight niches tailored to certain demographics and interests.”
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
Comments are currently unavailable. Please check back soon.