Original URL: http://www.theregister.co.uk/2011/09/09/cha_cha_launch/
ChaCha promises answers-by-SMS for free, sort of
Race to the bottom of vanishing old-fashioned market
US question-answering service ChaCha has launched in the UK, promising to provide for free a service that others have failed to make viable at a pound a time.
ChaCha joins AQA and 118118 in offering Brits an answer to any question, submitted by text message for answering by a bot or human depending on the complexity. But while AQA and 118118 charge £1.50 a time, ChaCha reckons it can provide the same service for nothing at all.
Well: almost nothing. Users have to pay for the text message asking the question, which won't be part of their bundled texts but shouldn't cost more than ten pence or so. ChaCha takes the termination fee on that message, which it reckons is enough to cover its costs, though many in the industry are dubious.
When half the population has Google in their pocket, and is willing to turn half an hour of enjoyable speculation into an instant answer, it might seem strange to pay for questions to be answered at all. Certainly the question services have had their heyday, but there's enough convenience in being able to ask a direct question that some people will still pay for it.
Like its rivals, ChaCha provides answers to any question submitted by text message, running the query though a natural-language interpreter to try and get an automated response out first, passing it on to a human if that fails.
The company tells us that in the USA, where it has been running since 2006, 70 per cent of questions are answered automatically. Another quarter of the questions are in the database, but aren't interpreted automatically so have to be understood by a human (who gets thruppence for their effort), leaving 5 per cent of questions to be answered manually by self-employed "Guides" who get seven pence a time.
Scott Jones, founder of ChaCha, told us that this combination results in an average cost of tuppence per query, which is covered by ChaCha's share of the standard price paid for the text message.
That money is collected by OpenMarket, but checking with network operators we were told that ChaCha's short code (85852) was listed as having no termination fee at all. They also suggested that OpenMarket could change that price, but that would force them to increase the price of the message to the end customer.
We took that up with ChaCha who are adamant that their business model is sustainable, with a two-year model that won't see any increase in price, and if they really can answer every question for tuppence a time they might be right.
In the US the company has been accused of some pretty shady practices, including sudden cuts in the rate paid to Guides and incentive schemes that make it almost impossible for Guides to earn the published amount. Jones puts that down to the company's developing business model, and assured us that in the UK Guides will get the 3p/7p rate from the word go, though there may be the occasional incentive awards on top of that.
To be fair to ChaCha they are only claiming that UK Guides can earn  "pocket money answering questions" – you'd have to answer a question every 42 seconds to earn the UK's minimum wage, but you can do so on your own time and from home.
We put the El Reg standard question ("Which is the rarest Moshi Monster Moshling?") to ChaCha and AQA for the sake of comparison. Both companies give different answers, ChaCha referencing the rumoured "Bounce" while AQA stuck with what was actually available, but while AQA charged us £1.50 for the information, ChaCha only cost us 10 pence: enough to drive the competition out of business even if it turns out to be unsustainable in the long term. ®