Going Beyond Google, with Guides

An ambitious startup is trying to outdo Google's bots with thousands of human guides.

By Susanna Hamner, Business 2.0 Magazine writer-reporter

(Business 2.0 Magazine) -- Can the world's leading search engine be beaten by a voice-based alternative? Scott Jones thinks it can - and he knows a thing or two about voice and search.

Back in the 1980s, this veteran Indiana entrepreneur invented voice-mail hardware now used by practically every phone company and IT department in the world. For an encore he founded Gracenote, whose database is used by music players like iTunes to look up track names when you stick a CD in your computer. If Google (Charts) is ever to be dethroned, Jones has as good a chance as anyone.

Jones, now worth more than $100 million, is just getting started.

Fourteen months ago he co-founded ChaCha, a search engine that aggregates other engines like Google and hires human guides to do the searching for you. Jones is banking on a vast customer base that is too technophobic or time-crunched to do its own searches - like Jones himself. (He came up with the idea while he was trying to write a speech for the National Academy of Sciences and found it faster to call up knowledgeable friends than to google his topics.)

By January, Jones had signed up 30,000 guides, who log on from their homes and answer user queries in real time via an instant-messaging client. They're paid up to $10 an hour, depending on how users rank the quality of their efforts.

Don't like your guide? Give her a poor review and switch to another with a single click. "I want the bad ones stripped of their ranking," Jones says. Culling notwithstanding, he expects to have 300,000 guides by June - as well as 1 million consistent users.

But Jones doesn't much care how many searchers log on from their desks. His real goal is to make ChaCha the search engine of choice for cell-phone users.

Next fall, Jones says, ChaCha will be available at a toll-free number. Easy searches - weather, stock prices, sports scores - will be handled by voice-recognition software; the rest will go to ChaCha guides. Their top-rated results will go into the voice-recognition database for future users.

Jones says callers will be on hold for 15 to 30 seconds waiting for their results, making that a great time to throw targeted voice ads at them. Toss in the ads that online searchers see, and Jones thinks he can make $12 million next year, while paying his guides no more than 20 percent of revenue.

That's a tough sell, but at least one Internet luminary agrees: Amazon.com (Charts) CEO Jeff Bezos, who in January invested $6.5 million in ChaCha. Cell-phone providers will replace 411 services with ChaCha by 2010, Jones predicts.

His long-term vision: instant access to ChaCha guides via a button on near-invisible Bluetooth earpieces. But while Google succeeded by building a better search algorithm, ChaCha depends on a factor beyond Jones's control.

"Its success hinges on the quality of its guides," says Greg Sterling, founder of Sterling Marketing Intelligence. "But it does have the potential to be bigger than Google."

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.