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Posts Tagged ‘chacha’

We’ve always had a lot of fun with Indianapolis-based startup ChaCha. They launched in 2007 as a human powered search engine – meaning a human found you answers when you typed in a query. Pranksters, obviously, loved it. And we noted the high cost of hiring humans to basically do Google searches and return results to people.

The human powered web search never really worked out. But ChaCha evolved. In 2008 they launched a mobile version of the service that lets users ask questions via SMS. Putting a human into the mix makes sense with mobile, with poor (or no) data connectivity and hard to use keyboards. But all phones have SMS, and ChaCha had a hit on their hands (they also had the infamous Eiffel Tower incident).

And ChaCha also made another smart move. They started archiving questions and answers on their website in January 2009. 300 million of them are now published on their website – you can view and search them from the ChaCha home page. Those pages have lots of ads generating revenue, and the search engines tend to rank pages like these highly. The company serves just under a million page views to answer pages per day, they say.

CEO Scott Jones says the company has had “explosive growth” in usage of their mobile product. In fact, the company has had to take steps in the past to control that growth, by limiting the number of questions people can ask each month. Even so, people now ask ChaCha a million questions a day via SMS. They recently passed Google and ChaCha is the no. 1 SMS search service according to Nielsen Mobile.

Those mobile questions bring in revenue, too. I asked ChaCha tonight “When and where is Avatar IMAX playing in San Francisco?” The first response, less than a minute later, was an advertisement. The second message came a minute later with the correct information: “AMC Loews Metreon 16 101 4th St. San Francisco, CA 94103 (415) 369-6201. Showtimes for 12/31/09. Avatar IMAX 9:45 am, 1:15, 4:45, 8:15, 11:45. ChaCha!” Even on a smartphone, and even dealing with the ad, it was far easier to use ChaCha than doing a mobile search via Google.

And while there are a number of easy-to-use movie apps for the iPhone and Android, ChaCha is a multi-purpose app. I can just as easily ask it for flight schedules. Or the first king of England (answer: “No one is universally recognized as the first King of England. Some historians start with Egbert, the king of Wessex”).

We’ve said all along, though, that the ChaCha mobile service was useful. But we questioned its scalability since it involves humans.

Jones says they’re scaling just fine, thanks to tens of thousands of part time guides who work from their homes for an average wage of $2.50/hour. It’s not much, but they do it voluntarily, so they must think it’s a reasonable deal. The cost of answering a question has dropped from $0.50 two years ago to just a few cents today, and Jones says they’ll get it to under a cent soon. They’re able to recycle a lot of answers, he says, and they’ve built tools to make it easier for guides to quickly answer most queries.

The company is now profitable per query, says Jones, meaning they are making more money from those SMS ads than they pay the guides. And when you add revenue from the archived website questions, the company is on path to profitability. Their current revenue run rate is $9 million or so. My guess is they need to roughly double that to become profitable as a business and support their 60 or so full time employees.

Jones says has raised $52 million, including a recent $7 million round from insiders. We’re tracking more than that on CrunchBase and have asked the company for clarification.

So ChaCha may just have a real business on its hands, despite the near constant criticism from us and others over the years. This is one time that I won’t mind at all being wrong.

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Human powered search startup ChaCha has been the subject to a little bit of ridicule at TechCrunch since its launch, thanks to its entertaining snafus and some issues with its business model. Despite its various problems over the years, the company has been able to raise a boatload of money, as much as $62 million, adding another $4 million to the pot most recently.

Unfortunately, some of the human “guides” who find the search results for visitors to ChaCha are taking a pay cut once again. Last summer, ChaCha implemented a “Pay-For-Performance” system, that forced guides to work five or more hours per week if they want the higher payrate (20 cents per question), which we said would alienate the site’s more casual (but accurate) users. Regular guides would make 10 cents per question. It appears that at some point over the past year, ChaCha lowered the Transcriber rate to 4 cents per question. Now, ChaCha has decided to cut the rates of “Voice Transcriber” guides (people who transcribe voicemail questions and answers) to 3 cents per transaction, with the pay cut taking effect last week.

ChaCha said that because the startup is answering nearly 600,000 questions a day, they need a workforce of more than 55,000 guides to answer the questions properly. The startup claims that their budget is too small to compensate transcription guides with higher payout. In an email sent to guides, ChaCha said that Transcribers have enjoyed the “relative” highest pay of all guide roles, with other types of guides (i.e. the guides that answer questions) and even ChaCha headquarters staff enduring pay cuts beforehand.

We contacted the company to inquire about these cuts, and were told that the “Pay-For-Performance” system was eliminated in February and replaced with a pay system based on the difficulty of the question answered. Many of these guides are only interested in making a quick buck, which is why there are frequently poor search results. But for other guides, ChaCha is an extension of the workday, offering some relatively easy money to help supplement their incomes. Under the new compensation system answering a math question would get a guide 20 cents but answering a more simple question would only get 10 cents. This seems like an improvement to the previous flawed system, which seemed to alienate many guides who actually answer questions correctly.

Regardless, the cut from 10 to 3 cents for transcriber guides over the past year is considerable and will likely see some backlash from that faction of guides. Last year, guides were apparently not being paid on time by ChaCha.

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How do you know if someone’s online profile is real? The question has plagued us for some time now, but is become increasingly problematic as vast swatches of the mainstream of society goes online and joins a social network, whether is be Twitter, Facebook, or whatever. The problem is of course rife on dating web sites.

One of the ways celebrities who arrived early on Twitter verified their profile was to Twitpic themselves in front of their Twitter profile. But now a new startup has taken this verification idea to its logical conclusion. CheckedProfile launches today in the US, but is actually the brainchild of long-time UK entrepreneur Ben Way, who is now based in Fort Lauderdale, Florida.

Here’s how it works.

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Not sure when this started occurring exactly, but Yahoo is apparently now letting Firefox users know that they’d be better off switching to the “new, safer Internet Explorer 8″. Apart from this tweet sent out yesterday, we haven’t noticed anyone noticing, so we suspect it’s fresh and a direct result of the recent Yahoo and Microsoft love-fest.

How ironic. About a year ago, following a failed acquisition attempt by Microsoft, Yahoo ran a very different recommendation from their front page, advising Internet Explorer users to switch to the “NEW safer, faster Firefox 3″ instead.

Apparently, Yahoo recommends browsers based on what their latest business alliances are. (update: or as Michael puts it, Apparently The Safest Browser Is Whoever Is Paying Yahoo The Most)

Maybe they should just develop and market their own browser and rid the confusion?

More screenshots:

(Hat tip to @jacook11)

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This one slipped through the cracks, but apparently Brad Bostic, who co-founded mobile Q&A answer service ChaCha together with current CEO Scott Jones back in 2006, has stepped down as President of the company and will not be replaced.

In an interview with the Indianapolis Business Journal, Bostic stresses that he will stay involved with the company as an advisor and strategist, saying ChaCha has matured enough for him no longer to be needed for day-to-day operations.

“I’m doing some evangelism for the company at trade shows, at conferences. [To say I] ‘left’ is not the appropriate characterization,” Bostic said.

More interestingly, Bostic openly discussed the fact that ChaCha is struggling to become a profitable company in the current economic climate, despite the fact it fired 1/3 of its workforce and brought on salary cuts for the rest of the employees earlier this year.

ChaCha lets people ask questions from their mobile phones to have humans (so-called Guides, often part-timers working from home) attempt to correctly answer them by text message. ChaCha makes money by embedding advertisements in those answers, and advertisers pay only when users respond by clicking through to the text ad. In the past, we’ve questioned the scalability of its business model, and we’ve also made fun of some of the answers that have been sent to users by Guides.

We pegged the company’s total funding at $58 million, but Bostic in the interview says only $43 million was poured into the company, among others by Amazon founder and CEO Jeff Bezos. He also said the company is not yet cash-flow positive, but that there is a consistent growth in audience and revenue is starting to come in.

Let’s hope for ChaCha that Bostic’s evangelizing at conferences spurs more thereof.

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IMshopping has launched a human-powered shopping search site and Twitter shopping service designed to help consumers find niche products on the web. It’s sort of like a shopping 411 service, which human guides on call respond to product questions and provide personalized recommendations for users about what product best suits their needs. IMShopping tries to simulate the experience of going into a store, speaking with a sales person and being guided to the item that works best for you. IMShopping also closed a $4.7 million Series A round of funding from SK Telecom Ventures.

IMSHopping hopes to fill the gap pf personalized, detail-oriented service that e-commerce sites don’t have, since these sites are focused less on answering technical questions about a product and more on price and reviews. Twitter users can directly ask questions by messaging @imshopping. The shopping guides in the community and trained experts offer detailed responses within minutes. Shoppers can use these responses to instantly make purchases or save to their own folders before making a product decision.

Shoppers who are asking questions on IMShopping’s site can search IMshopping’s database for product questions that have been already answered, or pose their own shopping questions (the site currently has an archive of 20,000 questions). As the shopping guides craft their response, they review a detailed analysis of the product, including specifications, reviews from third-party sites, blog buzz and price. This response is then delivered to the shopper and also archived anonymously for review by future shoppers. All public questions and responses are searchable via Twitter or can be viewed by following @imshopping. Consumers can also ask direct questions via Twitter that are not made public.

The guide will give you an answer of where to find your desired item and also provide you with links to sites where the item can be purchased. You can also rate the response you received from the guide-the guides are paid based on the quality and etail of their responses. The site is really designed to get answers on where to get hard to find or obscure items-like what electronic toy is best for a hyperactive two year old. If you already have a specific item in mind, the site may be useless to you.

As a business model, IMShopping collects revenue when consumer buy products that are recommended through the site. The problem is that when a consumer finally gets the right product for their needs, what is there to stop them from then searching for the produt on Google. The company is staying quiet on future business plans we are told that over time the company will roll out programs for general consumers to earn value from assisting on searches and getting rated for the quality of their answers.

Human search hasn’t done well in the past; take a look at ChaCha’s former business model. It’s hard to understand how human guides could do better than Google or Yahoo unless the guides are experts in electronics, clothes etc. IMShopping is hoping to add the human touch to the online shopping experience but increasingly retail sites employ staff to conduct live chats with potential customers.

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