Calacanis on Local Search

ILM:07 was fortunate to have Jason Calacanis, CEO of Mahalo, as a speaker. Always a straight shooter and a prolific blogger, Calacanis is very outspoken about his feelings about search, social media, SEO and local search.

When asked about the Facebook phenomenon, Calacanis said “Facebook is the best technical social network who iterates faster than anyone else.”

As for the company’s valuation, he had a very different opinion. “Facebook is overvalued,” he said. “If it come onto the open market they would never have gotten the multiple they got from Microsoft. It is extremely difficult to believe social networks can monetize their traffic for advertisers because users are not there to spend money except for online dating. Putting an ad on someone’s page is not very effective since it must compete with their social life like where to go tonight, ‘Bambi’ the exotic dancer wanting to join his circle of friends, and their online poker habit. Quite frankly people don’t want to be interrupted in their social pursuits to be faced with an ad for something they are not in the mind-set to address — see me later!”

When asked about his new search portal, Mahalo, and its human search approach, Calacanis was quite frank: “Getting humans to skim the search results to pull out spam and irrelevant search returns offers users the best most relevant results. This is the best way to compete with Google. Our goal is to seek out people who are passionate about topics and can help create the best, most focused search results for users.” Calacanis agreed that “human level local search is a way to make local search more competitive since it is calibrated to the local market. We sit between Wikipedia and Google, and this is a logical competitive position to do battle with Google.”

Taking a crack at how to improve local, Calacanis’ response was: “Local is too hard to achieve because you have to reach out to too many people with a big sales force and it’s hard to maintain your costs. Automation could make local more attractive and generate better returns.” After a bit more thought, he added: “Local SMEs are getting more sophisticated and smarter about online.” In fact, his dog trainer surprised him with her “level of sophistication and understanding of SEO and online marketing, which may be an indicator of a more attractive SME audience who would be easier to approach and sell.”

TKG’s Peter Krasilovsky asked the now famous question about Calacanis’ feelings about SEO and his infamous quote “SEO is for losers.” Calacanis qualified his perception, saying “my impression of SEO is tainted by the raft of bad SEO guys who are losers. They give you traffic that you don’t necessarily deserve through bad tricks and dishonest approaches. It is more about content that drives organic traffic and gets your content picked up in search engines, Digg, blogs and other high-profile sites.”

As a former AOL alum, Calacanis was asked his opinion about the ability of AOL to resurrect itself. “They [AOL] have always had brilliant people along with a contingent of tenured dial-up people who were unwilling to change,” he said. “This caused a lot of inner conflict that was tearing it apart. They have a ton of opportunity with their new advertising platform. The purchase of Advertising.com was one of their best purchases because it helped them migrate toward an advertising network model. “Look, AOL has all the components to make them successful search, ad network and social networks, which AOL owns, that could give them the potential to really have a chance of winning. If they spin off from Time Warner, they could have the last laugh.”

The long and short of Calacanis’ comments go to several of the key themes heard over and over again at ILM:07 — relevant content, deep content and engaging, passionate people are all needed to make a highly relevant and personalized search experience. Mahalo and Calacanis are both worthy of watching, regardless of how you feel about either one.

(Pic by Mel Taylor)