Match game: companies that connect customers with contractors and service providers on the web are fighting for turf in Colorado and beyond.

• Author: Peterson, Eric
• Position: Q4 TECH REPORT

Sometimes finding a plumber or other service provider can be akin to pulling a marble out of ajar. You can just pluck it out and hope it's not a bad one. But there are too many different marbles to be sure.

However, consumers can also hop on the Web to do a little bit of research before making a decision. Plenty of businesses and other organizations want to help by vetting the plumbers and other service providers before you pull one out of the figurative jar, from the nonprofit Better Business Bureau to numerous for-profit companies, including Golden-based ServiceMagic, Indianapolis-based Angie's List, and numerous others that see this space as a lucrative--and growing--market.

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Consumers considering their options might feel they're merely picking another marble out of a jar to help them better select that initial marble. For the plumbers and other service providers who may well have to pay a fee to get vetted, choosing one of these organizations as a marketing tool can be something of a guessing game as well. Who vets the vetters?

So far, that task has fallen to consumers, who have been turning to these sites to help simplify their search for the right person for the job.

GOLDEN COMPANY SEES BOOM IN REFERRALS

At ServiceMagic, business is booming. "We're hiring 200 employees by year's end," says ServiceMagic CEO Craig Smith. "We've continued to grow the business in spite of the economy."

Smith says the new hires will be in sales and tech support, and the lion's share--170 of the 200--will be in Colorado.

Smith touts ServiceMagic's network of 60,000 service providers in the U.S., as well as "a few thousand" in France, the United Kingdom and Canada. The nearest competitors' networks are in the neighborhood of 1,500 to 2,500, he adds--"orders of magnitude" smaller. (One former ServiceMagic employee points out that many companies start similar businesses with the hope of selling out to the online contractor referral industry's 800-pound gorilla once they accumulate a network of a few thousand vetted professionals.)

ServiceMagic's business model is based on contractors in the network paying a fee per referral. The fee varies from $5 to $75 based on the size of the job and other factors. This differs from the model of Angie's List, which charges consumers a nominal monthly fee to access customer reviews. Service providers--which include home professionals as well as doctors and mechanics--cannot become members, but companies with positive reviews can advertise on the site in the form of a discount to the site's members.

Smith attributes...