Trending: Amazon’s future in Seattle uncertain as neighboring city looks more and more like HQ2

amazon home services introShould Angie’s List be worried that a retail powerhouse like Amazon has entered the home improvement space?

Following Amazon’s announcement yesterday, investors are selling off the Indianapolis-based company’s shares, which are down 26 cents, or 4.2 percent, today to trade at $5.94 a share. Meanwhile, shares of Yelp, which also offers reviews online, appear to be less affected, and are trading essentially flat at $47.65 a share.

While some investors believe the answer is yes and believe Angie’s List is under threat, analysts are more mixed on the issue.

Angie Hicks is the co-founder and chief marketing officer of Angie's List.
Angie Hicks is the co-founder and chief marketing officer of Angie’s List.

Piper Jaffray’s Gene Munster said in a note to investors that Angie’s List are two completely different services. “Comparing Angie’s to Amazon is apples to oranges in many ways, as Angie’s List is advertising based (91 percent of revenue),” he wrote, according to Barron’s. In contrast, Amazon will generate income by taking a cut of the revenue from each projected booked online through its marketplace.

Another analyst, Blake Harper at Wunderlich Securities, provided a different opinion, saying that Angie’s List will struggle due to competition from Amazon. Today, he cut his price target on Angie’s List from $8 to $6.

In a note to investors, Harper wrote that Amazon will likely succeed at the business “given the help it has with partners, synergy from 85 million customers who bought a product on Amazon in the past year that required a service afterward, as well as its merchandising and deep focus on customer service.”

Meanwhile, he said Yelp’s business will be less affected because only 6 percent of its reviews and 26 percent of its revenues came from Home Services in final three months of 2014.

amazon home services costsIt’s true that Amazon is not directly competing with Angie’s List and Yelp. It wants to build a marketplace, where customers are able to search for providers, get a quote and schedule an appointment all from the same interface. We wrote about Amazon’s ambitious plans yesterday, and separately, talked to Peter Faricy, the VP of marketplaces, who headed up the highly anticipated launch.

In some circumstances, Yelp does allow customers to book hair appointments or set-up a meetings with lawyers online, but it’s not offering the same services that Amazon is aspiring to offer.

The more likely competitors for Amazon will be from a staggering number of startups in the space that are similarly looking to automate the home services process, from searching to bidding. Those companies include Pro.com, Porch.com and Thumbtack.com. Another one, HomeAdvisor, is owned by IAC/InterActive, and therefore one has some exposure to the public markets. However, since IAC owns a host of companies, including Match.con and Tinder, its shares will not Amazon’s moves in the same way.

IAC’s shares were up 73 cents, or 1 percent, in afternoon trading.

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