A few years ago, it became apparent that IAC’s ServiceMagic had stalled. While the 1,200 person company has continued to show growth, and had expanded to several international markets, it was clearly vulnerable to new challengers, ranging from Angie’s List and Yelp to new companies, such as Repair.com and RedBeacon (now owned by Home Depot.)

Part of the problem may have been that its assortment of services didn’t reflect how people look for service information. Part of it may have been that after 12 years, it was a tired brand to those in the industry, and unknown to those outside of it.

Now the company has pushed the reset button under the leadership of Chris Terrill, who’d served executive stints at Nutrisystem, Blockbuster and Match.com. Terrill’s been on board for 18 months now, and has extensively studied what he has determined is a “half billion dollar plus opportunity.”

“It’s about more than improvements and home projects,” says Terrill. “It’s all things in the service space.” Looking at the competition, Terrill sees a lot of potential to carve out a unique role for Home Advisor. “There is no go-to, ‘Trip Advisor’-like brand in the homes space,” he notes.

Rebranding is key to much of the company’s next steps. Home Advisor, the name of Microsoft’s real estate portal, was purchased from Microsoft for “less than six figures,” says Terrill. “It was the deal of the century.” The new name does a lot more for the company than the limited idea of “service” and the generic “magic,” he notes. Terrill adds that a major branding campaign, including TV, kicks off in January.

“We didn’t want to stop at the name change,” Terrill emphasizes. “We have completely changed the user experience.” New elements include a project cost guide, which users can use to project the actual cost for projects right down to local zip codes. Another new feature is Home911, which is an emergency service app. There is also content for home remodeling. Users can research it to “get beyond aspirational,” says Terrill.

What isn’t changing very much is the business model, although Terrill says it continues to evolve. There are basically two options. Consumers will still receive several qualified paid leads when they are looking for work. Different pricing is in effect for the standard lead or leads from Home911. What won’t change is that consumers will receive services for free. The company’s surveys showed that 90 percent of consumers would never pay for service information.

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The home and trade leads space was getting a lot of attention a year ago, with a number of social media driven leads companies hoping to cut in on longtime leaders such as ServiceMagic and Angie’s List. Among the contenders: Cox’s Kudzu, Redbeacon, Likelist, HelpHive , Sears’ ServiceLive and Thumbtack.

Not much has been heard from the space since then, but it hasn’t been standing still. Redbeacon landed a deal with Yahoo; some new contenders have jumped in (i.e., The Washington Post’s ServiceAlley); and Angie’s List has landed another $24 million in financing as it heads toward an apparent IPO.

Angie’s List and ServiceMagic, in fact, are all over the airwaves with their commercials — among the most prominent ambassadors for the Interactive Local Media ecosystem.

Thumbtack, too, says it has been quietly making inroads. The 11-person, San Francisco-based service, landed an angel round in June 2010. Since then, it has signed up 110,000 home and trade pros (and rejected 5,000 that did not pass its background checks).

The site has generated 100,000 leads in the past three months (30,000 in the last week). It also has done well with consumers, generating 390,000 unique visitors last month.

The site’s traffic comes largely from SEO, rather than from media partnerships. It works efficiently because only job specific information ends up in the search results (i.e., San Francisco Plumber). “It means we have what you are asking for,” says CEO Marco Zappacosta.

The service, which is national in scope, rather than focused on individual markets, works with home and trade pros in two ways: They can either opt to pay for leads upfront or pay commissions after they get the job.

Leads are only provided to home and trade pros on an opt-in basis, allowing for vacations or full schedules. That differs from lead gen providers that require pros to accept a minimum number of leads towards a monthly commitment.

Which revenue model that is ultimately chosen varies from category to category. More established professionals in higher end categories, such as roofers, want to pay for the lead upfront. They have internalized their sales cycles. After they have gotten a lead, they don’t want to monkey around (with leads providers such as Thumbtack).

On the lower end, home and trade pros such as tutors or handymen want to pay a commission. They don’t have a lot of cash flow, and they may not trust the leads provider to provide a good lead, at least the first few times they use them, says Zappacosta.

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The Washington Post continues ramping up its vertical strategy, launching Service Alley to provide leads for home and trade professionals. The site, which is a standalone and not directly linked to Washingtonpost.com, follows the launch of other Post verticals, such as Capitol Dish.

The site currently serves Washington D.C., and its Virginia and Maryland suburbs. It efficiently divides listing categories in three main groups: “Cleaning Services,” “Inside the Home” and “Outside the Home.” It features full-fledged directories of providers built on licensed data; and a “Coupons in Washington D.C.” section.

In addition to procuring leads for home and trade providers, the service also has weekly deals of service providers with a strong viral element. If three friends buy a deal based on your recommendation, the deal is free for you. Only businesses that have been well reviewed are allowed to participate.

The site also has a convenient list of your own favorite providers that you can use for reference (although, in the spirit of review generation, it might be better to have made it a list of providers that you have actually reviewed).

Service Alley has also been designed to maximize its use of social media. Users can connect with their friends and neighbors via Facebook, and check out their recommendations in Service Alley’s directory, which is built from licensed data.

Currently, there are two tiers of participation for service providers. The free basic tier gives three free leads and some basic info and charges $9 every time a coupon is activated from the coupon directory. A “pro” tier is $30 a month (or $300 per year) and enables unlimited leads, multiple listings in different categories, testimonials and awards listings, and a discounted $3 coupon activation rate.

Interestingly, the engine that powers Service Alley is provided by TeachStreet, the Seattle-based site that connects consumers with classes and teachers. While TeachStreet remains focused on its own fast-growing activities, it turns out to have an engine that is totally compatible for home and trade providers, says The Post’s Tim Condon, who is director of new digital ventures.

Condon tells us that The Post determined that there was plenty of room for a new entrant for home and trade in town, and that it was time to get back in the water. The Post had tried out a number of home and trade-focused dot-com projects over the years, including a big effort with BigBook in 1998.

The Washington metro area, of course, with its strong demographic profile, is one of Angie’s List’s best markets. But home and trade leaders such as Angie’s List and ServiceMagic are relatively closed systems, says Condon. To use them, you either have to be a member or accept the leads they give you.

By jumping in the water now, The Post beat the likely entry of other home and trade sites, such as Redbeacon, ThumbTack, LikeList and HelpHive. It also gets a jump on efforts by existing providers such as Kudzu and ServiceMagic. The challenge — as it is for all these services — is to ramp up the sales efforts for this hard to reach but valuable segment.

The Post’s Tim Condon is a featured speaker at ILM East in Boston March 21-23.

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Angie’s List, the premium ratings and review service for home and medical services, has announced that it has raised $22.5 Million from institutional investors as it prepares for an IPO within 18 months. Investors in this round include some public funds managers, including Wasatch Funds.   The company previously raised $48 million, making for a grand total of $70.5 million raised. Battery Ventures remains the lead investor.

The Indianapolis-based service charges members anywhere from $10 to $67 per year for access to its ratings and reviews. The service reports over one million members, which probably translates into at least half a million paid and trial accounts, since there are typically two members per  account.

Current revenues are not disclosed. But in 2008, roughly half of Angie’s List’s $50 million  in revenues had come from  membership and set up fees. The other half had come from advertising from reviewed companies that are highly rated (“B” and above) as well as national companies, such as appliance makers and retailers. Advertising can be found on the website as well as in a printed, monthly magazine that is well read by members.

Angie’s List has grown its mission considerably in the past couple of years. It has raised its profile with  aggressive television, radio and print advertising, and added medical reviews, which it has intended to eventually break out as a separate, paid service. It has also added national services, for categories such as custom car restoration – it takes its Indianapolis roots seriously– and recently unveiled The Angie’s  List Big Deal, a group buying effort that is now in 30 local markets and will be in 50+ markets by year end.

The big question marks for Angie’s List are whether it can simultaneously sustain its growth in the face of free competitors, such as Yelp, ServiceMagic and others; get beyond its older, home owner demographic; successfully extend its service to the new categories, and others; and maintain its friendly, home-spun “community” image.

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Redbeacon, the six-person San Francisco-based service referral company, announced today that it has raised a heady $7.4 million in Series A financing from Mayfield Fund and Venrock. CEO and Cofounder Ethan Anderson tells us that the company needed such a huge round to quickly ramp up the staff, including engineers, designers and marketing people; aggressively expand markets beyond San Francisco (although no markets have been finalized); and build a wide range of business partnerships.

Anderson notes that demographics and population size will play a large role in determining its next markets, but that business “distribution partnerships” will also play a role. For instance, Redbeacon is currently testing with BT in the U.K.

Partnerships, however, will consist of all shapes and sizes, including communities, search engines and media sites. The commission basis for job leads will “monetize better than advertising,” predicts Anderson. It will also feel like a natural, value-added feature of their sites. Partners “will drive tons and tons of traffic,” he says. “They’ll be moving to value added transactions to users.” The site currently works with BigTent, the women’s group site. It also works with several companies that remain unannounced.

Partnerships are being extended to individual SMBs, which can be partners by plugging a Redbeacon widget into their site. They can emphasize specific service categories and service providers among the leads that are carried and receive a piece of Redbeacon’s 10 percent commission for jobs. A plumber, for instance, could provide a link to dry wall repair. “It is very contextual,” says Anderson.

Anderson adds that the site’s big challenge right now is not so much online competitors such as ServiceMagic, QuinStreet and others, but “changing consumer behavior,” as people are still used to picking up the phone. The social aspects of the site should help along these lines, especially the solicitation of consumer reviews, which complement reviews imported from Yelp, Google and Yahoo. Anderson notes that 50 percent of consumers who use the service for a job are providing reviews.

As for learnings from the site’s launch in San Francisco, Anderson says it is now up to 4,000 small businesses and service pros, and “is always getting more. It is almost enough to make the service work” with price quotes on every job, he says. “People are getting price quotes from very good providers.”

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Site founder Marco Zappacosta says the funding will be used to expand Thumbtack’s eight-person team, which is based in San Francisco. It will also be used to expand key features such as e-mail marketing, appointment management and its “Personal Concierge” service.

Zappacosta tells us that the site has evolved considerably from its earliest days. It is now focused on simple tasks such as invoicing, record management and appointment management. “Payment solutions are really hard to pull off,” he says.

The company remains wedded, however, to its core concept of providing “deeper, richer” background on service providers rather than relying on licensed lists. It now has profiles on 40,000 service professionals in 11 markets, including Atlanta, Chicago, Dallas, Las Vegas, Los Angeles, Miami, New York, Phoenix, San Francisco, Seattle and Washington, D.C.

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Profits, however, were low at $1.2 million. They were held down by increased marketing efforts, including an expanded sales force and a major advertising campaign. Losses caused by the rapid expansion of the company’s international unit also held profits down.

ServiceMagic CEO Craig Smith is keynoting at Marketplaces 2010, March 22-24 in San Diego.

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This has been the year for new sites that combine service directories and social features such as ratings and reviews.  Earlier this year, we saw sites such as RedBeacon, HelpHive and others launch. Depending on definitions, earlier entrants include Citysearch, Yelp.com, Tree.com’s Done Right, FixR , LocalPrice, Insider Pages and Center’d.

Behind their fancy Web 2.0 veneers, they are all going after an SMB leads market that has previously been defined — and is still being defined — by ServiceMagic, Angie’s List and the Yellow Pages.

Now along comes AlikeList, a new contender backed with $5 million from Syncom Venture Partners. As the name implies, the 15-person company enables people to save their local business recommendations and share them with friends via Facebook and eventually other platforms. It also plans to bring together local groups such as Home Owners Associations and PTAs. At the same time, it has an “all members” section that goes broader for Yelp-like recommendations from the general community.

This new service efficiently connects all the dots of Web 2.0 marketing. In a single dashboard, it provides reputation management services, and provides full reporting on Web site clicks. If services have 20 or more listers, they can create instant direct marketing packages, with coupons, updates, etc. On the business side, businesses will pay on a monthly basis for membership, and a per-contact basis for jobs they receive.

What we see is it all seems well executed, especially with its highly usable map features (one of its execs is a former MapQuester). But frankly, all of the new entrants look good.

Earlier Facebook-oriented services such as Loladex couldn’t get the traction they needed, and were ghettoized by relying too heavily on Facebook. But AlikeList’s timing ought to be better in terms of technology adoption, plus it has more money. In coming months, we’ll be studying this one closely to see whether it will stand out.

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