Deal Radar 2008: Mahalo

This story was written by Sramana Mitra.

Mahalo, which means thank you in Hawaiian, is a human-powered search engine founded by former Weblogs co-founder, Jason Calacanis. The site launched in public alpha in mid-2007 and public beta in October 2007. Mahalo focuses on handling requests thatare filtered with the help of a team based in Santa Monica, California, to avoid the spam and other junk results that clog other search engines.

Expert guides determine the most relevant results for search terms. The primary results, which have been hand-picked by the guides, constitute the 'The Mahalo Top Seven' area at the top. The page also includes Guide Note, which includes additional information on the search term, and Fast Fact. Mahalo's guides are constantly workingto improve results and add more queries. The site also allows users to submit their own links for consideration;these links are then published if voted for. If the user searches for a term that is not in the database, Mahalo displays related pages and also allows the user to choose results from Google, Yahoo, Live Search, Wikipedia, etc.

In June 2007, the company launched Mahalo Greenhouse,which pays users (read freelancers who are effectively part-time guides for the company) for submissions. The program allows the 'part-time guides' to build search results for search terms that have not yet been included in Mahalo. If the user's page is accepted, the company will pay $10 to $15 per search result. Towards the end of the year the site added social networking features like user profiles.

The company is well funded for an alternative search engine: Mahalo raised a $5 million Series A from Sequoia Capital and Mark Cuban in 2006 and a $16 million Series B from CBS, News Corporation, Sequoia Capital, Mark Cuban, Jonathan Miller, and Elon Musk in 2007.

In November 2007, VentureBeatreported that the company is looking to raise another $20 million in a third round of funding at a potential valuation at $175 million. Mahalo was also said to be open to an acquisition or a partnership for 'opportunistic' reasons.

The company hasn't started selling advertising yet and plans to begin at the end of this year. In April 2008, ValleyWag reported that the sitebrings in$9,000 a monthin revenues and needless to say, is not yet profitable. However, Jason Calacanisis not worried yet.Mahalo was valued at $100 million before the second round, and the round was raised to help see the company through the nextfour years without any revenue.

According to Compete, the site attracts 2,872,210 monthly unique visitors on 3,780,562 monthly visits. That's a lot of visitors, although, all the searches I tried on Mahalo, came back saying, "We haven't created a page for "XXX" yet."

By Sramana Mitra

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