Monday, December 15, 2008

Mahalo Launches New Money Making Scheme "Mahalo Answers"

Calacanis and crew have launched yet another Mahalo born project called Mahalo Answers. Mahalo's vesion of Yahoo! Answers, Google Answers or ChaCha, lets you offer a tip to ask specific questions of other Mahalo users. Upon receiving a satisfactory answer (assuming you get one) users can give their promised tip, choose to give nothing at all, or give a little extra — depending on how happy you are with the answers.

For answer seekers, that either choose not to look on their own or absolutely can't find an answer themselves you can purchase "Mahalo Dollars" at a cost of $1 regular dollar per 1 Mahalo Dollar. Those that wish to provide answers, and some how see this as money making opportunity can answer as many questions as they want, however they will need to be considered the best answer as only one person receives the "tip". Upon reaching $30 you can then redeem your Mahalo bucks for real money, but watch out because Mahalo will skim 25% off the top. That's right you are hit with a 25% withdrawal surcharge to cash in your Mahalo Dollars.

As CNET News points out economically, [for Mahalo at least] this will be seen as a brilliant move--if it works. That's because, as Calacanis says, "Everyone is working on spec." When you ask a question, you put money into the system, and Mahalo is the bank. When you answer a question, you put knowledge into the system (which has value), and you might not get paid. Only one answer gets the bounty, and then Mahalo keeps 25 percent of it.

That is one hell of a money making scheme, Mahalo cuts a quarter out of every dollar for being the middle man. Sadly there are probably folks out there that will be duped into using the service. The funny thing is most of the answers probably won't be searched within Mahalo, but searched on Google and I'm sure more than a few will be asked and answered for free over at Yahoo! Answers, and then re-answered for pay at Mahalo.

As our friends over at ValleyWag pointed out the pay-to-search business is a lousy one. Google tried and failed, ChaCha had limited success, Yahoo! and Answers.com are a couple of the only ones that has really made a go of it, but they are both free services.
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Posted by Richard M. at 6:41 PM
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10 comments:

  1. I think your assumptions about Mahalo Answers are based more on personal bias than personal observation.

    While there is always room for improvement, and it is true the tips are paid only to one content provider, the very fact that a content provider is being paid at all is a step forward. How many corporations have gotten rich off of content without paying for any of it, by simply offering free hosting for that content they generate revenue from?

    It is not a "money making scheme". The web site brings in users, the users bring in dollars. I am glad to pay Mahalo a handling fee for providing me the framework to do freelance consulting on an informal basis. In case you are wondering, this is not hypothetical, either. I have earned $117 on the site over 2 days, simply by answering questions. In addition, a good number of the questions I answered have not reached resolution, so the tally is not complete.

    I'm a real person who made real money. Feel free to check my profile on the site, to confirm it.
    Without Mahalo, those questions would not have come to me, and I would not have earned anything for answering them. Additionally, my answers would never have been valued, as they would have lacked the delivery system Mahalo provides.

    I have no problem using their framework, and helping finance it. I don't expect Mahalo to operate for free, and increased revenue for the site will mean increased revenue for it's users.

    One reason Mahalo will succeed where the other projects you mentioned have failed, is precisely because it is a system designed around value. The quality of the answers will increase with the amount of the tip. It will be a useful alternative to businesses looking consulting work. It's a fast system, and the community is professional and dedicated.

    Yahoo Answers is a trivia site. There was never much useful information on it to begin with, and those few users who did offer content to Yahoo for free, will come to Mahalo, and never look back. People who make good contributions like to get for paid for them. That encourages more good contributions.

    Google Answers was slow, costly, ill-managed, and had no community whatsoever. It was a terrible system, and that's why it got scrapped. There's others of course, but they are not notable enough to detail their flaws, anyway.

    The bottom line is this: Mahalo works because it is based on reciprocity. That's a pretty revolutionary idea to some corporations... and they'll fight it all the way to the grave. Their greed and control will be their downfall. GooTube, like any empire, will fall. The wheels are already in motion.

    Jason was right, you know. All you need to do is take a look at your search results on Google to see what useless shit they are. It's a problem that has only increased over the last several years. Like all revolutionary ideas, people talk trash about them and say they will never work. They'll change their tune, when we change their piper. That's the reality of the masses, and the inevitable result of a revolution.
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  2. While I'll admit there is no love loss between me and Mahlao my points are still valid. A 25% surcharge is outrageous, and is pure and simple a money making scheme for Mahalo, I'll note even Jason admit that in his post about Mahalo Answers.

    While I applaud your use of the system to earn some money, I'll quickly note that of that $117 the majority was from one post. Not a bad take for a single answer however once you cash out that will drop to around $90. Had you worked hard on providing 75-100 different answers over the course of a few weeks or a month or two that 25% off the top wouldn't sit as well as it does now.

    Another way to look at this, if PayPal or another online payment system charged the same 25% no one in their right mind would want to use it. So why be so gun ho about making more money for Mahalo. Would bank users support a 25% cut from their accounts just because the bank hold their funds. I think not!

    I found this interesting, it looks as though a few people have found a way to use Mahalo Answers as a spam platform to drive traffic to their site. The question Who is the author of AdesBlog.com? was obviously posted by the blog's owner. For the offer of an imaginary dollar he found a loop hole to get a link back as well as few extra hits.
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  3. I also saw the AdesBlog post. I agree the potential for spam is within the system. In that particular instance, I doubt the 3 or 4 hits he likely received to his website (and that's probably a pretty accurate estimate based on some testing I did), would be worth the $1 he paid to post the question. If you can find me a way to get 25 cents per visit to my site, I'll give 25% with a smile.
    A losing proposition in that instance, however... the potential for it to be used by advertisers is definitely there. If I was running a small business and wanted publicity, I would part with $1000 to ask a question. At this stage in the site's existence, that money would be well spent, given the ensuing publicity a user winning $1000 tip would generate for my business. Is this really a problem? Not to the user, nor the business, nor Mahalo.

    I will go a step further and say that allowing for the integration of advertisements into the system makes good business sense, so long as it is done through questions and not through manipulated answer postings, as well. If McDonalds want to offer a $100 tip to ask who is "lovin it" the most, I'll sure as hell be.

    I don't want to see Answers turn into a paid survey online contest, by any means, but as long as questions are getting asked, and answers being chosen in a fair manner, I'll pretend not to notice if an answer on favorite soft drinks is posted by a user named pepsicorp... Let's face it, it's a commercial world. As long as that doesn't get in the way of genuine users having a way to exchange information, and an opportunity to get something back for their contribution, I think it is a step forward.

    25% might seem steep, but the site needs to generate revenue in order to sustain the framework that brings in the other 75%. Let's face it, 75% of something is a lot better than 100% of nothing. That's what I've gotten from any YouTube videos I have posted, that have generated revenue for them.

    Mahalo is providing a service in connecting people. I don't mind the fee. The more successful Mahalo is, the more people it will bring who will offer me tips. If you knew of an alternative that provided me a bigger slice of the pie on as consistent of a basis (or more), I would definitely look into it. As it stands, the majority of my writing, I am doing for free. Like this comment, for example. Having a format where I can have a chance at being paid for something I would probably be doing anyway, seems like a nice perk right now.

    Seriously, though, if you have alternate methods that offer a better opportunity, I'm not only willing to listen, but would be eager to hear them.
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  4. Man does Jason have his users blinded. Given your responses I'd almost say you were being paid by Mahalo to reply to less than favorable postings, but sadly I've seen other users like yourself that get dupped into thinking JC is the next best thing to Linus Torvalds.

    It doesn't matter how you slice it cutting 25% off the top is a ridiculous amount of money. I can honestly say I've never seen a service that takes a 25% cut off the top. Jason has one hell off a racket going there.

    As for being willing to pay, why on earth would you. Mahalo uses advertising to generate revenues just like any other site out there, they shouldn't need to bleed their users dry by taking that big a cut. I could see 10%, maybe 15% at the most. And of course lets not forget you also get dinged with PayPal fees, so now you are looking at nearly a 30% ding of the top.

    For alternatives, hmm maybe that should be your next mahalo question? But seriously, there are several paid for content sites out there. Sorry I don't have a list readily available, but there are alternatives.
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  5. Richard, it would seem my glowing reviews were colored very much by the lottery winnings I received...

    I'm afraid, it turns out many of your criticisms are valid, and there's a lot more.

    Over the last few days, I've grown disillusioned... both with the site and it's operation, and with the CEO. This is a guy who after I asked him two simple yes or no questions, refused to reply. Sure, I realize he owes me no reply, but one would like to think when TechCrunch, in association with Mahalo, use your name is an article, you'd at the very least get a question answered without being ignored. Apparently not.

    It's a personal slight, and frankly, I don't appreciate it. Beyond that, it came at a time that Jason pitched Cannon over twitter asking what he could get to plug their products to his 45k "zombies" who follow him. Must be nice to not only ignore your followers questions, but profiteer off of them, while condescendingly insulting them, as well.

    These things, and things like these, put me off Jason... completely, but it wouldn't be fair to let my growing dislike for his personality and profiteering, affect my view of Mahalo Answers. I'm sure I'm not completely objective, but this brings me to the most important reason I no longer support the platform.

    Mahalo Answers is gameable. Completely gameable. I suspect it is so, because Jason himself and his staff are the primary ones gaming it. Where do the M$ come from? Well, if you are a user, you need to buy them at a 1-1 ratio with real money. If you are Mahalo, you simply create them out of thin air, and then "put them into the system". I read a claim that Jason had put hundreds of thousands into that system, on an msnbc news article, to promote tips. Is there a paper trail for all those M$, or are they just being created by the site? Good luck getting an answer on that. I strongly suspect it is the latter.

    Regardless, the system is being gamed. Once M$ are in the system, the only way for them to cost Mahalo a penny is if they are converted to real money via paypal. The majority of this time, this does not occur. Instead what happens is this: Someone affiliated with Mahalo Answers who was given the M$ by the site (by their admission), posts a question offering a large tip $20-$100. Users believing they have a shot at it put in an amount of work, and that is what it is, based on the amount. MA gets around 20 good answers, for free, and then selects another MA-related user as the winner. The M$ go round and round, transfered through the Mahalo Answers affiliate botnet, and never reach an actual user who cashes them out (or do so only after multiple transfers, at best). It costs Mahalo nothing, to transfer the same M$100 from one affiliate to another, and each time they do this, they have essentially gamed the system, and saved the entire cost of that tip.

    I have witnessed this occurring on the site, and the evidence of it remains. I first suspected this when I noticed users who are direct employees of MA, not disclosing it on their profiles. One of them Is Mary. I have an e-mail from her MA account with a link to her profile, to demonstrate it. Even after I raised this issue, her profile was not changed. Instead Jason claimed all employees disclose. That is a lie, and I suspect he knows it. Why Mary is notable is because she has been funneling hundreds of dollars through the system, and selecting "best answers" that indicate the system is rigged.

    This would be no different than a business owner paying the $100 for M$100 and then asking a question that can be used to profit his business. After receiving all the answers, he selects a "best answer", and transfers that money to an employee or to an affiliate of his business. And the scam gets repeated ad infinitum. Mahalo Answers seems to be running the same scam, with the difference that the M$ do not even need to be purchased. They can simply be created.

    Due to the above, I officially withdraw all support for Jason Calacanis and Mahalo Answers. While it is possible to believe these are simply "accidents" or "coincidences", it would be naive to think so.

    Users have a right to know who the Mahalo employees are, and that they primarily select other employees to receive the tips. Users also have a right to know where the M$ used by these employees came from, and whether or not Mahalo actually payed for them, or just created them. In addition, and most importantly, users should know that the system in use can be gamed, and gamed easily, and nothing effective is being done to guard against this. I doubt that is negligence, but rather more profiteering, something which JC is a master at.
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  6. Mahalo for the feedback. Couple of quick points:

    1. If you click on the profiles of our staff you'll see they all disclose they work at Mahalo. If someone hasn't it's an oversight.

    2. 25% is very reasonable since it costs a lot of money to build an maintain a system like this. Google AdSense takes 35-45%, so we're a much better deal than all the ad networks.

    3. We have no interest in gaming the system to ask a question and answer it ourselves. That would be very short sighted. In fact, we don't have the TIME to answer questions nor do we need to since thre are so many folks answering them.

    4. Also, since we're making 25% it's better for us to
    sit back and collect that fee rather than waste time trying to answer our own questions!

    5. If you have specific examples where you think something is fishy just ask me jason at mahalo.com or ask a question about it on Mahalo Answers. We'll look into it immediately.

    all the best and good to hear from your John,

    Jason
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  7. Jason how does Adsense come into play here? What they take is completely irrelevant, you aren't an ad network, or are you saying you support using Answers as a form of advertising?

    Your role in this service would be no different than any other online payment site, accepting payments for a service just like paypal. Their highest fee is 3%.

    I'd agree if you are taking 25% why not sit back and suck up the money, but then again if you're staff is "so busy" then why are there so many questions posted by the staff?
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  8. "all the best and good to hear from your John"

    Was that a clever reference to someone being a prostitute? Made me laugh... I hope it was, because I'd hate to be let down by you again, Jason, based on an assumption.
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  9. You have to remember Richard that we must pay credit card fees, accounting and paypal fees as part of that 25%. So, in fact we're making 10-15%, which is more than reasonable.

    all the best and thanks for taking the time to help us improve Mahalo Answers!

    jason
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  10. Now Jason surely you aren't telling us that you are charging people for using PayPal as that would be a violation of their TOS PayPal User Agreement section 4.64.6 No Surcharges. You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method.

    I'd love the chance to openly confront some of the questions and answers on the Mahalo site, my account however was removed for a TOS violation, I guess pointing out that my name was still on pages I didn't get paid for was a violation. Odd isn't it? That really didn't matter anyways as I quickly learned you can't respond to questions unless you've earned 100+ mahalo pts. It would have been nice to get an open debate going with some of the "jason nation".
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