While analysts fixate on Angi's revenue struggles and the promise of international expansion, a subtle shift in Dotdash Meredith's (DDM) traffic patterns reveals a hidden opportunity that could have ripple effects across the entire IAC portfolio.

The culprit? Facebook's increasingly aggressive efforts to keep users glued to its own platform. While Facebook's declining referral traffic is a known trend across the publishing world, Angi, through its parent company IAC, finds itself in a unique position to exploit this digital land grab. Here's why:

DDM's core sessions grew a healthy 8% in Q1 2024, despite a staggering 50% drop in Facebook referral traffic. This signifies two powerful things: First, DDM's content strategy is resonating, capturing organic traffic and growing market share in a stagnant internet landscape. Second, Facebook's traffic, now representing a mere 4% of DDM's total, is becoming increasingly irrelevant to its success.

This decoupling from Facebook liberates DDM from the whims of an increasingly unpredictable platform, allowing it to focus on its strengths – high-quality, intent-driven content that attracts organic traffic and drives performance marketing. This strength is further amplified by DDM's innovative D/Cipher solution, which promises privacy-protected, intent-based targeting in a cookie-less future.

Here's where the magic happens: Angi, struggling to reignite consumer demand and improve user experience, can leverage DDM's burgeoning success to become the go-to destination for home services. Imagine this: a homeowner researching a DIY project on The Spruce, a DDM property, encounters an unobtrusive, contextually relevant recommendation for a pre-vetted contractor on Angi. The homeowner, already engaged in home improvement, seamlessly transitions from inspiration to action within the IAC ecosystem.

This synergistic relationship, fueled by DDM's growing organic reach and Angi's focus on customer-centricity, creates a powerful flywheel. Increased traffic to DDM generates high-quality leads for Angi, improving its service professional retention and profitability. A positive feedback loop emerges, accelerating Angi's path to sustainable growth while reinforcing DDM's dominance in the digital content landscape.

Projected Impact of DDM Traffic on Angi Service Requests

The following chart illustrates the potential impact of DDM's projected digital revenue growth on Angi's service requests, assuming a 5% conversion rate from DDM's incremental traffic.

Let's examine the potential impact in numbers. DDM's digital revenue is projected to grow 10% plus each quarter in 2024. If even a fraction of this growth is channeled towards Angi, it could represent a significant boost to its service requests and monetized transactions. For example, a 5% conversion rate from DDM's incremental traffic could result in millions of new service requests for Angi. This, coupled with improving service professional retention and monetization, could potentially push Angi back to revenue growth, surpassing analysts' expectations and unlocking significant shareholder value.

This hypothesis is further supported by the successful turnaround of Angi's international business, which has achieved 20% revenue growth in recent quarters. International success hinges on a similar model, prioritizing customer experience and online self-enrollment for service professionals. By replicating this model and leveraging DDM's content power, Angi can capitalize on Facebook's shortsightedness and emerge as the dominant force in the $600 billion home services market.

While the full potential of this strategy remains to be seen, the early signs are compelling. Angi's management team, armed with valuable international learnings and a keen understanding of its parent company's strengths, is well-positioned to exploit this hidden opportunity. As Facebook retreats further into its walled garden, Angi, fueled by DDM's content engine, can rise to fill the void, ushering in a new era of growth and profitability in the home services market.

"Fun Fact: Angi's roots trace back to 1995 with the launch of ServiceMagic, a platform connecting homeowners with pre-screened contractors. It subsequently acquired HomeAdvisor in 2017, forming the foundation for today's Angi Inc."