Mahalo Answers Success Story User Pulls Support

Mahalo Answers user budgallant, who was used by TechCrunch and Mahalo CEO Jason Calacanis to publicize the success of Mahalo Answers, has backed off his support of the site.

In response to my article "Mahalo Launches New Money Making Scheme" Gallant originally came forth with glowing support of the site, going as far as saying he didn't mind the 25% surcharge stating he didn't mind pay for supporting the site. That support quickly faded as Gallant now writes, "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."

Shortly after the launch of Mahalo Answers, TechCrunch and Calacanis essentially made Gallant their poster boy for the success of the new service when they ran the article "Mahalo Answers User Gets $100 Payday For Giving PR Tips To Strippers". With several sites reposting the success story, and almost 350 diggs, the article undoubtedly added a little fuel to the Mahalo fire.

That fire seems to be flaming out quickly as Gallant now tell us. "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, uses your name in 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."

It really wouldn't be fair to judge Mahalo or Mahalo Answers simply on the distaste Jason leaves in ones mouth and anyone that has talked to him or seen any of his interviews knows he's a hard pill to swallow. My negative views of the service were based more on the extremely high surcharge incurred by Mahalo Answers users wishing to cash out. Taking 25% off the top of payments seemed to be a bit extreme to me.

Once Gallant posted his original response I looked at Mahalo Answers a little closer. I had noticed a few things that really didn't sit right with me.

For one, there seemed to be several questions posted by website owners. Most the them were questions that would basically drive traffic to their specific site. So it looked to me like some of the users found a way to "game" the system and get some cheap/free advertising. Secondly, was the volume of questions posted by the Mahalo staff. That wasn't unusual as obviously you want to support your own site and what better way than using in house dollars to drive more support? However according to Gallant it would appear as though they were doing a bit more than that.

In comments posted to our previous post Gallant writes:

These things, and things like these [referring to his disillusionment] , 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.

At this time I can not confirm the fact that Mahalo is "gaming" the system in any way. I'm not familiar with the current staff so its hard to say who is and who isn't on the payroll. I can say that I see numerous questions and answer posted by Mahalo staff members that I did know. I don't know if they still work their nor did I take the time to look through all the questions and answers to see which staff members received tips for their answers.

Mahalo's response to this so far:

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.

Is Jason now comparing Mahalo Answers to AdSense? Answers is supposedly a Q&A site not an advertising network. Mahalo acting as the middle man would be more akin to comparing PayPal to eBay. All Mahalo does is provide the platform and transfer (via paypal btw) the payments. eBay and PayPal fees combined rarely top 10%, so my point is still valid. Taking 25% off the top is ludicrous!

As to the rest of the questions being raised, I'll let you come to your own conclusions and leave you with a few related links.

• Mahalo staff advantage?
• The Gaming Of Mahalo Answers
• Mahalo Rigged By Staff In Pictures
• Responding to a Mahalo employee
• Mahalo Confirms No Real Money Put Into The System By Mahalo

**Update**
Jason has posted a "semi-official statement", which ironically confirms the statements made by both Bud Gallant and myself. In another twist of irony, Jason feels as though my sentiment that Mahalo takes too big a cut is somehow motivated by my past dealings with Mahalo.

Jason you might want to read my post before making such claims. I have nothing against the Q&A process. My issue has always been the fact that Mahalo is engaged in profiteering. If you are making money off of your advertising then why is there a need to make even more money off your users by charging a surcharge.

I've said it before and will say it again, Mahalo Answers is nothing more than a money making scheme for Mahalo. It is a fairly clear statement one that Jason even admits, "For the record, our business model is to make money off of a) the 25% fee and b) advertising on the site (the Google ads you see)."

One thing I found interesting was that Jason and Mahalo Q&A users wanted to address this posting, however there was no reference to Mr. Gallant or his postings. As mentioned I'm not a Mahalo member therefore I can't respond on site. But I'd think you would want to address the concerns of your disillusioned members before address your critics.

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.

Closing The Book On Mahalo

Many of you might know of the on going struggles I've faced in trying to collect money that Mahalo owed me from my work with the company last Oct/Nov. These struggles eventually led to me having to file a small claims suite and take them to court. On April 7th we did just that.

On April 9th the judge decided that I had not provided enough evidence to prove my case, in effect deciding Mahalo did not have to pay me for more than two thirds of the work done during that time period. I guess we can chalk it up to my ignorance of the legal system, and just plain old stupidity on my behalf in thinking that when you work for a company and they use your work (an continue to do so) that you should be paid in full.

The judge did not bother to elaborate on what part of the issue wasn't proven, just that I did not "prove by a preponderance of the evidence" that they withheld earnings.

I guess I get to mark this down as a $2500+ learning experience.

Is Mahalo Having An Identity Crisis?

According to a recent article by Allen Stern over at CenterNetworks Calacanis and crew have made another change of direction. Now the "human-powered search" is a "research engine".

The move as I see it can only be a direct response to leaked Google documents regarding spam and the amount of original content per page.

"Final Notes on Spam
When trying to decide if a page is Spam, it is helpful to ask yourself this question: if I remove the scraped (copied) content, the ads, and the links to other pages, is there anything of value left? if the answer is no, the page is probably Spam."

According to CenterNetworks an email was sent to greenhouse workers last week with Jason demanding a few changes. They are now mandating a minimum of 300-400 word guide notes, a direct attempt at adding some of their own content to each page. Jason reportedly stated, "No guide notes, no google/yahoo rankings, and no traffic. No traffic, no money. No money, we all go home."

Aaron Wall over at SEOBook.com recently used the "Best Computer Speakers" page from Mahalo as a point of reference for his article "Official - Mahalo is Spam, According to Google's Internal Spam Documents" so to be fare we'll take a look at the same page.

In response to the article Jason defends the page as being "sort of experimental" and adds "Over time I think you’ll see our pages grow to be over 50% original content, 20% links, and 20% UGC (i.e. reviews, votes, comments)."

Several issues arise here but one is being that they are counting on 20% of their content to be user generated. If you look at the page in question (which has been revised since the article) you'll see there is zero UGC, zero Mahalo generated content on the main context of the page and what little original(ish) (thanks Aaron) content they do have is relatively unrelated to the rest of the page.

The page is supposed to be about the "best computer speakers" however all we see is a list of 5 speaker sets and where to buy them. Reviews are listed but there is no factual based information provided that tells me why or by whom the speakers were selected. Mahalo generates zero information in relation to what makes these the "best" they simply scrape tid bits.

Conclusion

So what makes Mahalo a "research engine"? Clearly it can't be seen in any of their recent pages looking over a few newly created pages listed on the daily serp list shows that. If they are going to scrape content to add to the guides notes to extend them to 400 words then they are missing the point of "original content".

Aaron Wall said it best, "Scraping content is not just about how many unique words are on the page. It is more about weather or not you add value. If you felt your original content added any *real* value (or was actually *here to help* - as your slogan suggests), I would suggest placing it in the left rail above all the ads."

Obviously time will tell, I'm sure Jason will will probably shift gears yet again and Mahalo will don a new label before long. The question is what is next? Obviously Mahalo is generating traffic, and even though Jason original said they had enough money to last years without advertising he must be worried about revenue generation. 75% of their traffic comes from Google, fear of loosing that will obviously force the team to get creative and make some changes.

For more reading I suggest checking out "Jason Calacanis and his human powered spam" from derekville.net and "What Is Going On At Mahalo?" posted on Profy.com by Michael Garrett.


Some Final Thoughts

After writing this post I noted a few things that raised some rather interesting questions.

Search engines don't typically index SERPs from other search engines, you don't get a Yahoo results page in your Google search and vice versa. So why do Google and Yahoo index Mahalo pages? Shouldn't they be excluded in the search results? What will happen to Jason's little pet project once they are excluded, after all 75% of their traffic is Google generated?

The second thought was the direct correlation between Jason's blog post about the example page and the pages Google ranking. I thought it was rather funny Jason's blog post ranked as high or higher than their SERP. Obviously Jason's not going to "nofollow" his links from his blog to the Mahalo SERPs, he wants to lend his PR to their pages. But that page and Jason's blog post are hardly the best results out there for the subject. Hell I'd go so far as to say Jason's blog post could be considered SPAM, which we all know he loathes so much!

Calacanis Wants to Ban Affiliate Links; What About Banning Employee Linking?

CenterNetworks' Allen Stern writes Calacanis Wants to Ban Affiliate Links; What About Banning Employee Linking? "Jason Calacanis, CEO of Weblogs 2.0 service Mahalo, has apparently left the world of pissing off SEO folk and is now pissing off affiliate folk. This time he wonders if the search engines (including Google, Yahoo and Mahalo) should ban affiliate links from being indexed."

Love him or hate him, one thing Jason will do is self promote. To me it reaches the extent of spamming. Its one thing to promote within your own blog or your own company, but having teams of employees actively posting links on social sites just to increase your traffic, page ranks or placement is no different than everything Jason says he's against.

Mahalo constantly asks employees, either part time guides or in house staff to push out the pages to their blogs and their social services. Once the social side of Mahalo was created Jason even sent out mass emails to everyone on Mahalo telling them to make sure to add his profile. And a big push was made for everyone to add all their profiles (MySpace, Flickr, Twitter ect), friends and any Mahalo employees they could so as to create a bigger web ring.

Some day Jason is going to have to give up his double standard and call Mahalo what it is. An SEO or SEM play. All you have to do is look at the page structure for so called "search engine result pages (SERPs)". Everything about the way pages are structured and created is directly geared towards optimization.

Now days they push more towards creating "stubs", optimized pages with 5-10 of the hottest links from Google, about the hottest trends. Maybe someone can tell me how these pages differ from Splogs. Scraping content and links from Google, chasing hot topics and Google Trends, if thats not Splogging I don't know what is.

Mahalo Lawsuit, Final Update

For anyone following my two previous posts "Mahalo Lawsuit Looks Inevitable" and "Mahalo Refuses Mentors Payments" this will come as no surprise. An agreement between myself and Mahalo.com was never reached, forcing me to seek legal action.

My case was filled in Sacramento County Small Claims court (case number 08SC00893) February 01, 2008. Our court date has been set for 04/07/2008 1:30 P.M. in Sacramento.

Its probably in my best interest to make no further public comments on the case until there is a resolution one way or the either. But I did want to provide everyone with an update and thank everyone that has shown support.

Mahalo Lawsuit Looks Inevitable

It looks as though the inevitable is likely, in less than a week I'll be forced to file a lawsuit against Mahalo.com and Jason Calacanis for failure to pay in accordance to the terms of our contracts. I made pretty much every attempt possible to reach an agreement and avoid going through the court process. However its beginning to look fairly dim.

The only recent contact came shorty after the follow up post to my original post "Mahalo Refuses Mentors Payments". I basically pointed out the fact that the pages they are refusing to pay for are still on Mahalo.com and for the most part they have been untouched or unaltered in anyway. The majority of these pages are still listed under my name and unfortunately I'm still listed on the email for the submitted user links!

To me this more than signifies the acceptance of those pages. Which in turn shows I fully fulfilled the terms of the Mahalo Mentors Agreement and my end of the contracts!

Given the fact they still had to calculate payments for December, of which I'm owed approximately $760, and they are never on time with those payments. I decided to give them until the end of the month to pay in full for all three months. Payment delays have always been an issue with Mahalo so they may surprise me!!

The lack of response to my email, which was a response to them calling, pretty much tells me I'm going to have to go through the legal system and fight to get my payments.

It pretty unfortunate that it has to come to legal action considering from July to December I devoted most of mt time and efforts to working with at Mahalo.com and with the members of the Mahalo Greenhouse.

Mahalo Dropping Payments to Guides

Allen Stern over at CenterNetworks summed it up well with his recent post Mahalo Changes Payment Plan and Yes, Jason Mahalo is an SEO Play - I've Got Charts

Beginning Monday, January 14th, we will be assigning smaller dollar amounts to extremely short SeRPs or very fringe topic SeRPs that aren't of high priority, and likewise, we will be assigning higher prices to SeRPs in especially difficult verticals or which are in high demand.

Mahalo was supposedly able to run for the first several years without generating revenues from Ads, however we now see that has changed. Jason at one time said they had enough capital to run for several years, however he has been actively searching for more money. ValleyWag seems to think Mahalo is burning money.

What gives Jason are you guys going broke? Do you honestly feel as though your guides are going to work their butts off to create a "great" page for $2.00? I wonder how many of your current guides are planning a mutiny? They've already been complaining about delays in payment and delays in having their SERRS accepted. It sounds as though things are sliding down hill fast over there! Thank god I got out when I could. Now if I could just get paid for the work I did for you guys I'd be a happy man!

Follow up to "Mahalo Refuses to pay it's Mentors"

As there has been a great deal of interest in my recent post "Mahalo Refuses Mentors Payments" and I've received several emails inquiring as to how things are proceeding I figured I'd better post some follow up.

Unfortunately there really isn't much to say. I had to wait until the end of December for them to contact me with the total number of pages they were refusing payment on. All told it ended up being 257 pages for a total of $2,510.00.

Following the legal guidelines I was given I sent them a demand of payment letter. In any situation such as this you must show proof that you contacted them asking for payment. So now the waiting game begins, they have until the end of the month to respond or remit payment.

I found out today that they have removed my greenhouse account, previously it was active even though it was not in use. I didn't plan on building any more pages so thats not really an issue however I found it funny.

Man vs. Machine - Jason Calacanis - Weblogs - Mahalo

From FastCompany.com By: Adam L. Penenberg

Serial Webmeister Jason Calacanis survived the dotcom bust and went on to sell Weblogs Inc. to AOL for $25 million. He says his new search engine--powered by people, of all things--will give Google a run for its money. We almost believe him.

read more | digg story

Mahalo Refuses Mentors Payments

Mahalo Refuses to pay it's Mentors

To make the long story short I've been working with Mahalo as a mentor since back in July. Well things have gone pretty smoothly with the exception of payments being continuously delayed until last month. I got an email informing me that there was a discrepancy with some of the pages that I've "mentored" and they needed to discuss our payment options.

I'm informed that because I spent less than 15mins "QC'ing" some of these pages they are refusing to pay for them. Later I'm told its because there weren't enough edits or major changes. Now as I can see it from the QC process no where does it specify that there even needs to be a change made.

# To check the quality of the work, follow this process:

* STEP 1: Assess the page and make sure it looks complete and well-organized. Are there any sections it needs to have but doesn't? Is there a Guide Note, Fast Facts and related tags? If it's missing anything important or fails to follow Mahalo formatting and style rules, kick back the page.
* STEP 2: Click the "Open Links" button on the guide toolbar. Wait a few moments for all the links on the page to open. Skim quickly over all of the links. If more than 1/3 of the links look questionable or fail to meet Mahalo standards, kick back the page.
* STEP 3: Do a quick Google search. Does Google's Top 20 have quality links that you haven't yet visited? If so, kick back the page.

# If the SeRP is not acceptable, click the "Decline" button and send an email to the PTG explaining what they can do to improve the page.

They provide me with a list of about 111 pages they are willing to pay in full for but the rest are "under scrutiny". Basically it works out to 359 out of the 470 pages I reviewed during October.

I'm given two options:
1. they can do a full audit of these pages and they'll pay me for the ones they think had enough work done or have been worked on since they were added to Mahalo. I'm not told what constitutes enough work nor am I given any guidelines for their review!
2. they will pay me 1/3 of the total sum for the remaining pages, this works out to paying me $3.33 per page or $1163 out of the $3590 they owe me.

Well not being one to take things sitting down I ask them to do a full audit of these pages. Which some how they manage to audit 359 pages with 3 full time guides in less than a week. Keep in mind they've told me that its not likely that I could have done the same thing in a full months time. They inform me that they are now willing to pay me in full for an addition 120 pages. Interestingly that works out to just about the 1/3 they wanted to pay in the beginning.

So I reviewed the full list of pages they don't want to pay me for. I noticed that several of the pages we were specifically asked to QC and move to Mahalo. These were either pages from other mentors, previously QC'd page ect. And several of the pages had numerous changes made. Which leads me to believe they infact did not do a full audit of these pages and I in deed should be paid in full.


In an attempt to reach an amicable agreement I offer to review the list of pages and they could pay me in full for the ones I feel I deserve a full payment for and a lump sum or $5/page can be paid for the rest. Or they can simply pay me $5/page for the remaining 239 pages. I still didn't understand why they were refusing payment to begin with as these pages were mentored per their guidelines. I felt no matter how you cut it I worked on all these pages and I should at least be paid a little for my time spent.

I received the inevitable response in the form of a phone call (Mahalo isn't big on putting things in writing} informing me that they are simply refusing to pay anything beyond what they have already paid. I'm still waiting on the payment for the 120 they are now willing to pay. They also inform me that there was an issue with some of the pages from November and they will now be audited.

So now it looks like they are going to refuse payment of anywhere from $2400 to $3200 (maybe more). Its my understanding that at least 2 other mentors had similar issues, with one opting not to fight, and the other asking for a full audit. So I know I'm not alone in this ordeal. But what a way to be treated for someone that worked their butt off for this company.

Mahalo Greenhouse Goes Live!!

Mahalo, dubbed the human-powered “search service” has accepted yours truly to be a part time guide. Even though they went live with the beta last week, it wasn't until earlier this week that I received my confirmation. So far things are rolling right along with 6 Search Results Pages (SeRPs.) done this week.

What is Mahalo you ask well check them out Mahalo FAQ's. If you'd like to become part of the Mahalo team drop by The Greenhouse. There you can find all the information on applying to become a part time guide.

For information on the projects that I've been working on visit my profile.