torsdag 31. desember 2009

ChaCha Makes Its Crazy Business Model…Profitable

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.

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