How Google's Latest Partnership Might Help You Find a Plumber

How Google's Latest Partnership Might Help You Find a Plumber
Image credit: Liang Zou | Shutterstock

Google is partnering with IAC's HomeAdvisor to better match homeowners with contractors like plumbers, electricians or landscapers, the company said Friday.

As of Friday, homeowners searching for contractors on Google will be shown results that are "HomeAdvisor screened and approved" and come with profiles, price estimates and the ability to "book now" or schedule an appointment to compare estimates for work. HomeAdvisor helps by screening all the contractors listed on its site — rejecting 15 to 20 percent of applicants. It charges an annual fee of $300 to be included in its listings.

"There are millions of local businesses, many of which are not marketing online. We think local advertising is probably around a $50 billion opportunity and only a small portion has gone online. This is why Google and Amazon and possibly Facebook (down the road) are getting more serious about this," said Mizuho Securities analyst Neil Doshi.

And indeed, other tech giants are interested; Amazon, for one, launched Amazon Home Services earlier in the year, in an effort to get a piece of this potentially lucrative market. (Also, showing just how hot this space is now, on Wednesday IAC announced a bid to acquire Angie's List for $8.75 per share. IAC said the board rebuffed the proposal. No comment from Angie's List.)

"Obviously, Amazon and Google are deeply embattled on multiple fronts and home services is no different," said HomeAdvisor CEO Chris Terrill. "Google realized that they don't want to let Amazon get too far out there and so they partnered with us to bring a technology that truly no one else has and I think would take them a very long time to build themselves."

At Amazon, customers looking for services are offered the option to book at checkout for a flat fee. That, said Terrill, is an important difference. "That's problematic because the service provider doesn't know how complicated the install is so they have to quote, literally, the highest price they can to cover all their contingencies."

"All the research we have done — both on the homeowner's side and the service provider's side — says that's not how people like to shop for home services," Terrill said. 

It's not the first time Google has shown an interest in the decidedly unsexy offline home services market, and the company is by no means placing all its bets with IAC. In August 2014 Google Capital led a $100 million investment round in home services start-up Thumbtack and in September made a follow-on investment in the company, now valued at more than $1.3 billion. 

Google is also testing its own service in San Francisco. Home Service Ads invites plumbers, cleaners, locksmiths and other providers to advertise and manage customer inquiries, correspondence and appointments, all through Google. 

Other players vying to stake their claims in the home services market include public companies Yelp and Angie's List, as well as private outfits Zaask and TaskRabbit. But, said Terrill, "If you look at the top task-based companies, we'll do more service requests in a few hours than they'll do in an entire month."

With no clear winners today, these services are addressing a real customer pain point. "There seems to be an opportunity for larger players or new start-ups to disrupt this space," Doshi said.

"Mobile is very important," he said. "TalkLocal is using a mobile-only approach where they will try to get a call by a service provider within a set period of time. Thumbtack is also taking a rich mobile experience. Basically, if you have an issue, and you are not by a computer you want to be able to reach someone and talk to them."

The rapid growth in this area can be seen in HomeAdvisor's revenue. IAC highlighted HomeAdvisor in its most recent quarterly earnings report, crediting the business for driving a 21 percent increase in revenue for the e-commerce segment. HomeAdvisor's domestic revenue rose 46 percent year over year in the third quarter, driven by a 53 percent increase in service requests and 30 percent growth in the number of professionals paying for the service.

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