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Mahalo Reduces Headcount by 10% After Google Algo Change
I feel for Mahalo founder and CEO Jason Calacanis this past week. He finishes his Launch conference (my recap), heads to the afterparty and probably gets 10,000 text messages because that was just about the time that Google announced their algorithm change. Assuming Jason wasn’t briefed by Google about the change, that really is pretty horrible timing and I wouldn’t wish that on anyone, even a guy from the B-line (I am D-line).
This afternoon Jason and Mahalo president Jason Rapp sent out a mass email noting that, based on the Google changes, they will be reducing Mahalo staff headcount immediately by 10%. Here are a few key points directly from Jason and Jason:
- (re: the google change) Despite those efforts, unfortunately, the Google changes have led to a
significant dip in our traffic and revenue. It’s hard not to be disappointed since we’ve been spending millions of
dollars on producing highly professional content. - Today we have eliminated a handful of positions in the company (about 10%), and we’ve cut a number of non-essential services we provide internally. In addition, we are re-evaluating our freelance content
production, pausing it in the near term and determining how to best produce the high-quality educational material we aspire to in the long run. We are not, however, diminishing our video production efforts. - Interestingly, while the search side of Google has impacted us negatively, Google’s video unit (YouTube) continues to be our strong partner, encouraging us to ramp up our video production and publish even more of our expert video lessons with them.
What’s really interesting to me is that I remember when Mahalo first launched, Jason told me numerous times he didn’t care about Google because he was going to build loyal users who would just come directly to Mahalo (e.g. similar to how we just go to TripAdvisor to look up a hotel).
Two other emails from Mahalo team leaders note that the “Guides” program will be placed on hold as Jason notes above. But they made it clear that Guides will be paid for work to-date.
Jason also notes, “The web is moving from the home of journalism and writers to the domain of experts. Web 3.0 is the era of experts–not writers.” They close by noting that they have strong board support for their move into how-to videos and have plenty of cash for a long runway.
Will Jason’s move to video make the 4th version of Mahalo successful? The only thing I am curious about is if he is paying his expert talent that appear in his how-to videos. His video interview in Germany seemed to indicate many of the experts are working for free to gain some rep points and badges.
If you are interested in learning more about the changes Google made last week, you can read excellent recaps by Danny Sullivan and Aaron Wall.
Update: In another case of really bad timing, Derek Springer noticed the lead story Mahalo is pushing today is “How to dress for a job interview”. See screenshot below…
[...] Launch and its founder, Jason Calacanis–who operates Mahalo, one of the content farms most severely impacted by Google’s Panda update–hold firm to their [...]
I don’t know where you got this information, but not all of Mahalo is Content Scraping and farming. There is original content on this website. How do I know this, because I have worked for them in one of their departments that are known as Guide or Guru (I prefer not to say which one), in order to work as a freelance writer for either area you have to agree to write original content that isn’t taken from another website. I don’t know if some content farming has been done on Mahalo, I only know that the area I worked for was completely legitimate, and I certainly don’t appreciate you claiming that the entire website was nothing but spammed content, because nothing and I repeat nothing could be further from the truth. This is slander to say the least, and I don’t appreciate it one bit.
Jason’s an idiot. Now he’s also changing Answers to where users can only buy Mahalo products or donate to charity. No more gift cards for users!
Very Bad! Google should re-think on the word “Content Farm”!!
Google never used the term “content farm” Perhaps you should read their post on the issue
JC knows Mahalo built it’s foundation on being nothing more than a content scraper. They “fast track” popular search terms like any other splog or content farm out there. Push their team to promote via Social media and artificially boost bookmarks and diggs. Instead of chasing the hot terms perhaps with the new move to Mahalo v4.0 they’d do something actually worthwhile.
Google claim these web site are mostly content farm website without original content. The truth is, the existing of these company are deemed to be threaten to Google. What Google itself really is? Does Google use its own original content all the time? Absolutely not! Google crawl, organize and index other website’s content and present them to the user, and name it “SEARCH”. This is exactly what these content farm website doing. I do believe Google did this so that they can be the only gateway to all the content over the internet. This is unfair competition, and all people impacted by this should take action
[...] At Mahalo, 10 percent of the company’s staff are being let go due to “a significant dip in our traffic and revenue,” said Mahalo CEO and founder [...]
Does anyone know if about.com has suffered the same kind of drops as Mahalo?
[...] Mahalo cut 10 percent of its workforce after Google’s algorithm change whacked the site. [...]
Jason C. is doing us all a favor by being so public with his company. He’s been trough several iterations trying to find a path to profitability using content creation. He has more runway than anyone else in the space. He will eventually find a business model that sticks.
I’m going to say that this is wonderful news. Mahalo, About, Hubpages, and all the other major players deserve to fry big time. Their advertising practices are highly deceptive, and they have adopted a middleman approach to monetize content. Their long tail search algorithms put them in bed big time with Google. Often times, the content they have is nothing more than rehashed and paraphrased, and based off of legitimate expert work.
It’s a damn shame and I hope they all fry in a scaulding hot deepfryer of adblock hell forever.
It may be spin to put pressure on Google blaming them for lay offs. Tripadvisor was built more by the public publishing information they could not find elsewhere that would be useful if shared.
[...] farm?” Should it be penalized by Google? Please, share your opinions in the comments.[via CenterNetworks] Print Story Email StoryTopics to follow Google 151 followersFollow Search 5 followersFollow [...]
Interesting that has happened however I am sure JC will find a way around this and manage to get Mahalo back on its feet.
Not a big fan of 4.0 but im sure there is plenty of things on the roadmap for Mahalo in the future.
Why Jason is wasting his energy and talent in content farming? He should do something more productive.
Now here’s a great question.
Scott,
A year ago we stopped doing articles written by generalists and passionate individuals (for lack of a better term), and started doing authoritative content with experts we’ve credentialed in them.
The results have been dramatic.
We spend our time credentialing experts and teachers now, and producing high-quality videos with them. For example, we have three or four excellent guitar teachers coming in a week. The 300-400 videos we’ve produce so far are among the best available on the web–for free or paid.
http://www.youtube.com/view_play_list?p=BE077DEF7EB33D00
We’ve found four cooking school teachers here in Los Angeles and we’re tackling that vertical as well.
http://www.youtube.com/view_play_list?p=8F711FE68ADA4888
Next up will be language, math and history. These are not perfect, but again they are among the best on the web (free or paid).
http://www.youtube.com/watch?v=yfiMho1_t4k
http://www.youtube.com/watch?v=zED6DFflsAI
http://www.youtube.com/watch?v=xeaawyzF8YU
http://www.youtube.com/watch?v=dN_oBqzELA0
http://www.youtube.com/view_play_list?p=D2521D2616635BAF
http://www.youtube.com/view_play_list?p=887048ECD49FDF31
In another year everyone taking shots at my team at Mahalo will be going to Mahalo.com to learn something. We’ll be teaching you, your kids and your friends.
We’ve got about 75% of the problem solved, and in the next couple of months you’ll see us adding lesson plans, quizes and other learning tools to our offering.
I’m not perfect, we all know that! Pointing out my mistakes is like pointing out the number of shots Michael Jordan has missed–it doesn’t take away his rings.
Sure I make a lot of mistakes……. but I am too stupid to give up, and I eventually figure out how to win. Luck? Perseverance? Pigheadedness? Genius? Perhaps the first three and a little of the last one.
If it takes me 10 pivots I will figure the “knowledge” problem on the web out. Human-powered search, Q&A and how to articles were just the start… we’ve been taking notes along the way. We’re building off these things and we can clearly see the path to greatness in promising niche players like Lynda.com and Kahn Academy.
Heck, after getting our butts kicked for our poor quality how to play Xylophone page we rebuilt it and now have the best page on the internet….. in the world. We did that in a week for under $1,000. Given that, we can do this for every single topic of note for about $50M–and we will.
We are going to have the best page for learning ANYTHING in the world over the next couple of years. It may take us $50-100M in investment to do it, but that will be meaningless when we have 1M+ videos making $3-7 a month each.
Please count me out Rafer…. it’s hate and doubt from people like you that puts the fire in my belly. I respect your accomplishments, so you counting me out drives me even more. :-)
Now go pick up some mallets and learn the gosh-darn Xylophone.
http://www.mahalo.com/how-to-play-xylophone-for-beginners/
best jcal
jcal,
You yourself pushed search engine rankings over accuracy in content, praising users and encouraging them with a share of money. Asked them to tutor each other in creating pages that would rank high and get ad revenue.
Not encouraging them to first create accurate content. Your “knowledge” problem is a false argument. The purpose of Mahalo is to generate revenue. To say anything else is a lie. Without revenue and a profit for you personally, the project would die quickly. As evidenced by layoffs.
It was an interesting experience. There was just too much junk offered as expertise, created solely for generating search rankings and ad revenue. That’s not something to be proud of, and that’s why I quit your site.
V
Not exactly true.
Our focus we equally on creating content and marketing it (which includes design, SEO and social media) I would say. Maybe SEO was 10% of the overall effort.
Today it’s 100% on just creating content. The marketing part has become a cold war that has escalated to the point of collapse. Everyone spent too much time on marketing, and now we all need to focus on just quality.
In terms of revenue, my experience is that if you make a great product revenue follows. We have 30M+ views a month to our 25k videos on YouTube. That’s double Mahalo.com’s traffic. So, the quality of the videos gives a clear roadmap for success: experts with credentials over everything else.
So is the old “pay for play” (and I’m clear to indicate it’s not content, but playing or gaming search engines) system gone? I worked hard on answering questions to get into the top 100 of “experts”, but quickly fell by the wayside as efforts shifted to dedicated pages with ad revenue.
Extending your comparison to Michael Jordan…Michael Vicks gets forgiven for past problems that showed bad moral character. Pete Rose does not. People in general are wishy-washy about the past.
How does immediate layoffs _not_ reinforce the image that Mahalo survives by gaming search-engines? Sacking and cutbacks as a direct result of Google clamping down on questionable or plain bad content…it’s a reaction that can’t be explained by a shift to “version X”. It’s tantamount to admitting that the content was questionable.
Does that mean the old system is deprecated?
Jason,
Not saying all the content from Mahalo is bad. There were a number of passionate/competent/sincere people who did provide solid answers or at least honest answers to the best of their ability. “Questionable” is a valid arm-chair assessment of the searchable content base, not an insult to the contributors.
–Al
Oh God, that xylophone tutorials… haha… shouldn’t have been mentioned! Annoying and useless stuff, really a waste hard drive space and bandwith :( Only good for encouraging more clicks for more crap. And even more annoying ads…
Why do you bother? This is the first time I’ve seen your pathetic blog on Techmeme in ages. Seriously – nobody’s listening.
also
“It’s hard not to be disappointed since we’ve been spending millions of
dollars on producing highly professional content.”… if it were highly professional content then the google algo would not have cast it aside.
Question: Why on earth would Google even consider briefing Jason Calacanis?
Allen, “interesting” that he’s repeatedly being search spam and has been caught out on the topic every few months since Mashallow’s launch? Why softpedal the guy like that when he loves nothing more than to yell at people for kicks?
[...] it will come too late for some employees. Founder Jason Calacanis announced today that Mahalo has cut about 10% of its staff due to traffic and revenue losses from the Farmer [...]
I personally haven’t been over to Mahalo in ages so I can’t speak to their newest incarnation, however I should say they should be lucky that Google didn’t make these changes before now or they never would have gotten anywhere.
JC is pretty enterprising I’m sure he’ll be out there with the rest of the farmers looking for a work around to the new changes Google has made.
Despite what’s happened it can be hard for a business leader to make a call this quickly to scale things back, will be interesting to see if Google retweaks things further over the coming weeks. Seems Mahalo is almost 100% reliant on Google for Revenue? (Adsense/Youtube?)
Wow – interesting can’t wait to hear about this on twit
[...] Google made its change, which is supposed to “reduce rankings for low-quality sites”. Allen Stern has more details. View Comments Tagged: Google, Internet, MediaMemo, Peter Kafka, advertising, [...]