ChaCha, KGB see text messages as alternative to search engines on cellphones

By Sarah Halzack
Sunday, August 15, 2010; G01

ChaCha, KGB see text messages as alternative to search engines on cellphones

Need to know the weather forecast for Boise, Idaho? Trying to settle a bar bet about the colors of the Zambian flag? Wondering which Pauly Shore movie came first, "Encino Man" or "Son in Law"?

For many people, finding an answer has practically become a reflex: Google it. But as mobile technology becomes increasingly entwined with daily life, at least two companies -- ChaCha and KGB -- are betting there's a growing appetite for a different way to get answers on the go.

Both firms are banking on the premise that cellphone users want a single, direct answer to a question. Many people still don't have phone plans that allow for Web use, and those who do, the companies' executives contend, cannot be bothered with sifting through search results on a tiny screen.

"The search experience is fundamentally different on mobile," said Bruce Stewart, chief executive of KGB.

Enter the idea of human-powered search.

Instead of using an algorithm to produce results, as Google and Yahoo do, ChaCha and KGB rely on people to generate their answers. ChaCha provides a free service that allows users to send queries by text or voice message and then receive a text reply, often accompanied by an advertisement, from one of the company's approximately 50,000 part-time responders. Competitor KGB has a similar setup, although its users pay 99 cents per answer and are spared the outside advertising with each response.

Executives of both companies say they are convinced that they can find a niche on cellphones, even as Google and Yahoo dominate the search market on computers. And both firms are getting some traction: The Nielsen Co. reports that in the first quarter of 2010, ChaCha's text service had almost 3 million unique users, while KGB's had about 1.7 million users. ChaCha saw a 4.3 percent increase in unique users from the fourth quarter of 2009, while KGB saw a 17.7 percent rise, according to Nielsen.

Despite those increases, some critics see difficulties for the companies as they try to gain footing in the shadow of giants in the search universe. Danny Sullivan, editor of Search Engine Land, a trade publication about search engines, said human-powered search "has a place" but cautioned that "it's not going to become Google. They're not even on the radar screen of becoming Google."

Sullivan and other skeptics have noted that the quality of the companies' answers is inconsistent.

"Typically when I've looked at them, the answers have been really poor," Sullivan said.

The texting services are most popular with teens and early-20-somethings. Although it wasn't ChaCha's initial plan to target that demographic, ChaCha chief executive Scott Jones said it makes sense that young people have been the service's earliest and most loyal adopters.

"Teens and young adults, that's where they live," said Jones, referring to the textosphere.

Jones, an entrepreneur, hatched the idea for ChaCha more than four years ago when he was slated to give a speech about the future of the Web. He began to use Google and other search engines to do his research but wasn't having much success. So he began calling friends at venture capital firms and other companies to pick their brains.

"I thought, 'Gee, why couldn't Google tell me this? My friend was able to,' " Jones recalled. For this and other queries, Jones said he wondered, "What if I could call some smart friend in real time?"

Soon, he and co-founder Brad Bostic were building out the technology to support the Carmel, Ind.-based company and establishing their network of part-time contractors. The privately held firm, which has received $52 million to date in venture capital money, launched in January 2008. Most of its revenue is generated from advertising, and the company expects to break even for the first time in mid-2011.

KGB launched in January 2009 as a sister brand of a British directory assistance company called the Number 118 118, which provides services similar to those received by dialing 411 in the United States. When the company set up shop stateside, they decided to branch out from providing addresses and phone numbers to answer virtually any question.

Known as "guides" at ChaCha and "agents" at KGB, the people who generate answers make their own hours, work from home and are paid according to the number of questions they answer. At KGB, they make anywhere from 5 to 10 cents per question answered, depending on the how much work was required to answer the question. ChaCha's pay also works on a sliding scale, with workers earning 2 to 25 cents per answer.

"They're working from dorm rooms, work-at-home moms and dads, retired people," Jones said.

At both companies, potential workers must go through a training process and pass a test to qualify. They are not required to specialize in one topic area, but many informally stick to answering questions about subjects that interest them.

Many of the questions sent to ChaCha and KGB have straightforward answers, with users seeking practical information about public transportation schedules and store closing hours, or obscure trivia on sports statistics or historical events. Both companies maintain databases of answers to commonly asked questions, enabling them to provide responses in seconds.

But other queries can be tricky. Some call for subjective responses (such as "What is Chris Farley's best 'Saturday Night Live' sketch?" or the cliched yet existential "What is the meaning of life?"), while others are complex or obscure enough that they demand in-depth research. These answers can take a few minutes to churn out.

One of the biggest challenges for ChaCha and KGB's business model is breaking news. Details of fast-moving stories often trickle out slowly and are revised and clarified over time, so it can be hard for the companies' databases and workers to keep up.

"The day Michael Jackson died was a big event for us," Stewart said. Questions poured in to KGB as conflicting reports began to surface, with some outlets saying Jackson was dead and others saying he had been hospitalized.

"We had to be a breaking-news source," Stewart said. His workers had to keep checking and rechecking answers to give the most accurate, up-to-date information on a quickly evolving story.

No matter the type of question, both companies monitor their answers for accuracy and relevance and flag workers who aren't making the grade.

With more people snapping up smartphones, ChaCha and KGB have launched applications for iPhones, Droids and other devices to keep up with advances in the mobile market. Still, Jones and Stewart emphasize that text will remain core to their strategies because it's a lowest common denominator on cellphones; virtually every device is equipped with it.

And, Jones said, the ubiquity and convenience of a text message are hard to rival. "It's hard to interrupt it because it's so bite-sized," he said of texting, "but yet text interrupts everything else."