[credit provider=”Mahalo via YouTube” url=”http://www.youtube.com/watch?v=uEq6mfeAODs&feature=player_embedded”]
Jason Calacanis started Mahalo four years ago as a “human powered search engine,” but the latest version of the site moves completely away from the original idea, and much deeper into web video and “how to” content.At the DLD conference in Munich, Calacanis will unveil “Mahalo 4.0” today. We had a chance to check out some previews and talk to Calacanis yesterday.
Here’s the big idea:
Mahalo is now going to focus on creating original how-to video content, plus some complementary text and user-generated Q&A (with live, real-time answers).
Think of it as Howcast (how-to video) + Quora (Q&A) + About.com (a more structured Wikipedia). Topics include things such as “How to Play Hotel California by The Eagles on Guitar” and “How to Cook Roasted Garlic Mashed Potatoes.”
The goal this year is to start creating (from scratch) 2,500 original videos per week in 4 studios at Mahalo’s L.A. headquarters. And Calacanis says the goal over the next couple of years is to reach 500,000 original videos. (Assuming “Mahalo 4.0” the concept makes it that long.) Right now, they’re making about 900 videos per week, Calacanis says.
To do this, the company plans to double in size from its current size of about 105 employees. It’s mostly hiring video editors, which also serve as producers. About half of its current staff are video editors.
Mahalo is working closely with Google’s YouTube in their partner program for this. (Smart, because it’s going to need a lot of Google traffic to support this.) It’s not building its own player or selling its own ads, but instead is hoping that YouTube can eventually monetise the videos enough through video ads to make them profitable.
Calacanis says YouTube can currently generate about $2 to $4 per 1,000 views, depending on the video. So a video that costs $500 to produce would need to be viewed about 160,000 times to break even at a $3 per 1,000 views revenue rate. Not unreasonable over a several years for highly searched terms.
Calacanis boasts that Mahalo is in incredible financial shape (without, of course, disclosing details) and that it has 12 million monthly unique visitors. He also notes that everyone now reports to Mahalo President Jason Rapp (formerly IAC’s M&A boss), and that Calacanis now just focuses on product.
Will this work? Lots of people will trash this idea, but it’s probably worth a shot. Calacanis is no dummy when it comes to getting web traffic, and that’s what will matter here. The site probably won’t be high-end, but the video views soar, they could eventually generate serious revenue.
Will Mahalo be able to create enough videos at the right cost in the right amount of time? Will it do SEO better than rivals like Howcast and eHow?
Will Google and other traffic sources generate enough views to make the videos profitable over several years? (If this idea lasts that long.) Will Google be able to continue to grow its revenue per 1,000 YouTube views as more ad money heads online?
Will Mahalo’s pages (and videos) survive a crackdown on Demand Media-style content farms?
Will a big media or Internet company eventually find this content library useful enough to purchase it?