When Mahalo first launched, my instinctive reaction (which I recorded on my personal Blog) was that this was "old wine in new bottles". Traditional publishers have been doing "human powered search" even BI (Before Internet) but these went by boring names like Directory. Human editors work great in well defined niches, always have done and always will. Human editors produce the expert content that Google finds for you. This is long tail publishing. This is Business Media and Enthusiast Media, large but slow growth traditional publishing segments of the media industry.

But an Internet scale venture powered by humans rather than software? We look at three reasons why this might work and two reasons why it won't work.

Three Pros And Two Cons

Most ventures in this space highlight three things that a human editor can always do better than a software program. These are the three Pros:

1. Spam control. Humans can easily spot even the most ingenious spam .

2. Duplicate control. 10 articles that all say virtually the same thing are just a waste of time.

3. Disambiguation. Computers need an awful lot of expensive programming to always spot the difference between "apple" as a fruit, a consumer electronics company or a record label. Humans can do it in a flash.

The two Cons:

1. You cannot persuade people to break their Google habit until your searches are better than Google for most cases (not just the few cases where you specialize). This massive hurdle is true for all search engines.

2. You cannot win as a destination site if you are general purpose. You go to the sites that specialize in the areas that interest you. If you don't know what sites to go to, Google will find those sites for you.

So, do three Pros beat two Cons? Not in this case. The Pros are three relatively minor irritants that human powered search fixes. The Cons are total showstoppers.

Pay People To Write Content?

Mahalo pays people to create content. That means they can predict the quality of the results. Paying people requires lots of funding. Mahalo has plenty of funding and it is unlikely anybody else will get funded with the same model. So Mahalo has a fairly long and clear runway before take-off. Mahalo is private company so we don't know how long it will take them to get to profitability or even if the basic economics make profitability feasible at all. In today's climate, nobody will buy Mahalo without a clear path to profitability.

Are you Bullish or Bearish on Mahalo? Cast your vote in our Company Index (powered by TradeVibes). My vote was Bearish and I was in the majority at the time I cast my vote (80% Bullish vs 20% Bearish). The sample size on that vote was too low to be meaningful (40), so the more votes the better.

The Elephant In The Community Generated Content Room

Most other ventures get "the community" to create the content. The elephant in this room is of course Wikipedia. How on earth do you get general knowledge content that is better at scale than Wikipedia? How do you motivate people to create content if, unlike Mahalo, you are not paying their salaries? Google's answer with Knol was to pay them indirectly via Adsense revenue. The market jury on Knol is still out. If Google cannot win, how can any other start-up without their brand power? If the Knol competitor also monetizes through Adsense, their margin is even less.

About The Players

The other well funded venture that wears the human powered search label is Wikia. Founded by Jimmy Wales of Wikipedia fame, this looks like the largest pure Wiki style venture. Content is community generated, but it appears that they have editors/moderators/curators on payroll.

Squidoo looks like a bootstrapped venture. It is hard to tell if it has traction. Looking at Squidoo's page on TradeVibes will point to many other inexpensive Wiki style ventures. The basic technology of Wikis is now a total commodity.

One of the earliest ventures, About.com, is now owned by the New York Times. On my survey of one, About is the one site other than Wikipedia that surfaces a lot in general knowledge type searches. At the scale they operate, it may well be profitable. So Mahalo, Wiki and other human powered search engines may have a bright future.

What do you think? Can general purpose human powered search engines scale and make money? Or will they either fail or move into small niches? What new ventures have a fundamentally differentiated approach to this market?

Antitrust is a lumbering beast and ineffective in fast moving technology markets. Historically, by the time it lumbers into action, the cycle is starting to move against the incumbent anyway. That happened with both IBM and Microsoft.

I have already written about the danger of a Google monoculture; and was flamed by people who thought I was being alarmist. Slowly-boiled frogs seldom get alarmed until it is too late. The launch of Knol has turned up the heat enough to alarm some more people.

Specifically, the issue with Knol is: how much Google tunes their search algorithm to favor Knol content vs alternative content on the same subject? This is where Google could be crossing the line. This is not so far from Microsoft bundling Explorer in order to beat Netscape.

Mahalo and Squidoo - Roadkill?

The companies that are most at threat are those like Mahalo and Squidoo, i.e. semi-automated aggregation plays. These appealed to VCs because they are more scalable than pure-play content. This market appeals to Google for the same reason. Mahalo, Squidoo and others are in the way and the steamroller is coming. They had better be really agile to get out of the way. They look like roadkill to me.

Google may make more money for individual content creators than they can make from Mahalo, Squidoo or alternatives. So Google will get the popular vote and that may be enough to forestall antitrust action.

However, even individual content creators may want to think twice. With Google providing both the content platform and the revenue, it feels a little bit like a medieval landowner who can change the rules on the peasants when it appeals to them. Of course Google would never be so evil as to exercise their “droit du seigneur“, but why put them in a position where they might be tempted?

The Google Threat to Content Creators

Anybody who employs content creators is certainly sensible to wonder when Google will re-define content in such a way that their business is threatened.

Content creators - whether the individuals or their employers - increasingly rely on either WordPress or MT. Google’s Blogger is a distant third. Both have powerful plugin architectures. There is good open source Wiki code out there. What does it take to create a Knol-like “persistent community content” plugin for WordPress and MT? That looks pretty simple technically. Maybe its already out there, riding below the hype radar. It would fit the author-moderated model of a blogger or Blog network. It adds persistent content (read “more page views”). It gets away from reliance on feeding the reverse chronological mill.

Then use OpenX rather than Google Ad Manager. And Piwik rather than Google Analytics. Bingo, it’s declaration of independence for content creators and their employers.