Calacanis's Mahalo Off to Solid Start

Jason Calacanis's new human-powered search engine, Mahalo, appears to be off to a solid start.  According to Jason, the site is currently serving about 50,000 pageviews a day (1mm a month).

Mahalo also recently launched a new "Greenhouse" program that addresses the primary business concern about the company--namely that the cost of hand-building SERPs will be so high that Mahalo will never survive.  The Greenhouse program allows the public to apply for part-time paid work building Mahalo search-results pages (SERPs).  According to Jason, Greenhouse received 800 applications in two weeks.  The company has hired 150 people as Part-Time-Guides (PTGs) so far and hopes to have 500 by year end. 

Greenhouse PTGs create SERPs based on the company's "Most Wanted" list, and Mahalo's full-time editors then accept or reject them. Mahalo is giving the first 100 PTGs to hit 100 accepted SERPs an iPhone. 

The Greenhouse program is currently producing 10-20 SERPs per day, at a cost to the company of approximately $10-$15 each. The company expects its PTGs to be producing 100 SERPs a day by the end of the year.

For most search queries, a human-edited SERP will be superior to one generated solely by an algorithm.  Here, Mahalo's ability to prioritize SERP-building is the key to success.  If the company had to compete with Google on speed or breadth, it would fail.  Assuming search requests follow standard distribution laws, however (e.g., 20% of terms account for 80% of searches), Mahalo ought to be able to invest its resources in building only the most popular and profitable SERPs, with links to Google for the rest. 

Assuming Revenue Per Search (RPS) of, say, $0.05 to $0.10, Mahalo would have to generate 100-300 queries per SERP to generate a positive gross margin.  It's not clear how long a shelf-life each individual SERP has (presumably minutes for some and years for others), but given the traffic the site is already generating, this doesn't seem a high hurdle for the company to meet.   

Comments

[beastlet]

i do believe that yahoo started out by doing manual classification....

[Ethan Stock]

Henry,

I can't believe that you've swallowed the 5-year-old marketing hype that the SERP at any major search engine is "generated solely by an algorithm". Everyone -- Google included -- has large editorial teams obsessively polishing the natural search results for high-value queries. They may do so by tweaking factors in the ranking models, but they apply a human eye and human intelligence to their editorial oversight. Major search engines have enough traffic and enough advertisers to know what SERPs are important and which SERPs are monetizable, and they have enough editors to make sure those SERPS are great (and profitable) results. Given this reality -- which is at odds with popular perception -- I find it very unlikely that Mahalo can ever carve out more than a minor media/editorial niche, their own marketing hype notwithstanding.

[Bjorn]

How does this compete with Librarians doing the same thing:

http://lii.org/

This service already exists. LII is more of an index, but it's searchable, and not just created by humans, but highly educated and specialized ones.

[Alex]

Yes Mahalo has some good pages, perhaps InfoCream may bridge the gap.

[gene simmons]

mahalo is not the first human-powered search...the first to have "guides" was about.com (which began as the internet mining company)...and wikipedia.org is another.

mahalo founder jason calcunlis is full of it

[curmudgeonly troll]

Jason always did idolize Scott Kurnit of about.com... undoubtedly planning to unload this steaming pile on a big dumb media company, as about.com was sold to Primedia and then NYT, and as Jason sold his blog factory in similar lame fashion to AOL.

[Steffen]

Hi, I also recently launched a search service - http://www.sputtr.com

Take a look and let me know what you think of it!

[TallTroll]

>> Everyone -- Google included -- has large editorial teams obsessively polishing the natural search results for high-value queries.

Ethan, I'm curious as to where you get this idea from? It's certainly true that SE engineers DO spend time manually reviewing results, and changing things, but in all cases the SEs are more interested in automatic (and therefore scalable) solutions.

Yes, Yahoo used to have a few results that were hand-picked, but even then it was typically only a few results for a given query, and Google have NEVER, EVER manually inserted results into a SERP (although they do regularly REMOVE results that are deemed to have contravened their guidelines)

These are not "editorial" decisions in the same way that Mahalo results are, not by a loooooong chalk. The machine makes the selections, and while humans may influence the machine, it's tweaking a black box, not making explicit selections in the way a directory does it. Philosophically, the difference is huge.

If you want a good example of how the differences play out in practical terms, look at historic versions of DMOZ pages for various pharmaceutical products (Xenical and Phentermine being prime examples). Versions where michelleanderson is still listed as the cat editor are VERY instructive... (go WMW mafia, LOL)