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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.
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…