Love Cha Cha

I can definitely remember when I thought Ask Jeeves was an incredibly cool idea. The predecessor to the well-known ask.com, its launch in 1996 made it a front runner in the world of instant answers to obscure (and common place) questions. No wonder that I am now an avid fan of Cha Cha (and LOVE the $2.99 iPhone app!). Profiled in December 2009 in TechCrunch, for those of you who are not familiar, here it is in a snapshot:

• Human powered search engine (fueled by tens of thousands of part-time workers, paid $2.50/hour, in addition to 60 full-time employees)
• Recently surpassed Google as #1 SMS search engine with 1 million+ questions submitted per day
• Have archived 30 million+ questions
• Multi-use -- eg, can use it to ask travel questions, movie show times, historical facts

The advertising side is interesting of this business model is particularly interesting. Intuitively, their ad space seems potentially less attractive -- while going to a travel site, like Kayak, means I am clearly in the market for a trip, asking a question to Cha Cha, such as "What date does summer start?" does not necessarily demonstrate this. However, this is exactly what came up upon typing this query in -- advertisements for various summer vacation-type destinations. A logical leap - yes. But, in my mind, even more risky than the ususal online advertising model. A question on an answers/advice website seems less tied to a potential purchase than would be a visit to a more targeted site. I do not have concrete data to understand what these more targeted sites look like however, despite my concerns, I learned that Cha Cha has successfully monetized this model --

• Each query is now profitable and they are operating on a $9 million dollar revenue run rate
• Ads are available not only for current - but also archived - searches
• And, investors appears to be taking a legitimate interest in their continued success, as they just earned another $7 million in funding, on top of their already-raised $52 million

Additional note of interest about Cha Cha is their recent entrance into the Groupon-like business model. Though only centered in Indiana right now (their home base) -- it builds on the Groupon model of current coupons to a variety of categories and businesses and allows mobile search and download of said coupons. Another way to continue to (1) build a fan base and (2) expand advertising revenues. The interface of this new Cha Cha Coupons is user friendly and seems to be an early mover in the space that Groupon is showing so much success in -- and Cha Cha appears to be expanding upon it, in that more coupons are offered at a single moment in time.

And, if only for the sake of being able to impress someone with your wit at your next cocktail party, Cha Cha is worth the $2.99 fee for the app download!