How does Q&A service ChaCha make money?

Bambi Francisco Roizen · January 17, 2011 · Short URL:

CEO says revenue tripled in 2010; CPMs are $10 for text ads and $25 for mobile video ads

Q&A sites are getting a lot of attention in the past year. Last week, Formspring raised $11.5 million from Benchmark. In December, Twitter bought Q&A site Fluther. Last October, ChaCha raised $20 million, bringing total funds to date to nearly $72 million.  Last spring, Quora raised $11 million for a reported $86 million. And, at the start of last year, Google bought Aardvark. Other startups are emerging in this space, like Law Pivot, a Q&A site just for legal advice, which launched last August. Meanwhile, other lesser-known, non-VC-backed startups, such as JustAnswer, are making solid revenue by allowing experts to charge for providing answers.

In this interview, I talked to ChaCha CEO and co-founder Scott Jones, how his company is making money.

Here are the highlights:

- ChaCha is answering about two million questions daily on mobile. ChaCha serves two ads per question and answer. That means ChaCha is serving four million ads via text a day.

- The CTRs (click-through-rates) on mobile is 3% to 5%. This compares to the .5% average CTR for online ads.

- Scott believes the CTRs are higher because mobile is a "conversational medium," which means people are engaged with their phones as they wait for answers. About 90% of texts are looked at within three minutes, said Scott.

- CPMs (cost-per-thousand impressions) are $10 for text ads and $25 for mobile video

- The competitve advantage that ChaCha has over sites like Quora and JustAnswer and other Q&A sites is that ChaCha makes timeliness a priority. While sites like Quora and JustAnswer can provide "exceptional" answers, the problem is the user experience, said Scott. One may or may not get a good answer, but they'll have to wait often for hours. ChaCha strives to answers questions in less than a minute. If the criteria for being a great Q&A site is relevance, accuracy, and timeliness (answers within a minute), then none of the sites can deliver to that metric, he said.

To be fair to the other aforementioned Q&A sites, ChaCha clearly targets a different demographic, as it provides answers that are more about pop culture. People asking questions on Quora and JustAnswer are likely OK with waiting more than a minute to get an accurate answer. If one were to type in "How" in the search box on ChaCha, the automated pre-fill pops up the question, "How many songs has Lady Gag sold." If one were to type in "How" into Quora, the auto-fill pops up "How does Groupon make money."

(Note: See past interviews with Scott to find out what kind of questions ChaCha is good for and what is its demographic. Interview 1: Who's using the ChaCha Q&A site? Interview 2: How ChaCha achieved its network effect.)

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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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Formerly known as JustAnswer®, the company has been growing revenue an average of 123 percent year over the last five years and currently generates revenue in 196 countries and 22 currencies. was founded in 2003 by serial entrepreneur Andy Kurtzig as a way for his then-pregnant and worried wife to talk with an OB/GYN about her round-the-clock health concerns in a more convenient way. Today, the company has evolved into a platform for people around the world to communicate directly with verified professionals in hundreds of categories as varied as pet behavior and tax law to antique appraisal and computer repair, anytime, from anywhere, affordably.

Recognized by the Better Business Bureau with an A+ rating and boasting relationships with brands such as, PetMD and Car Talk, is now one of the largest and fastest growing providers of access to professional services online. The company has increased revenue for 33 quarters since inception and grown an average of 123% per year since 2008. The Board of Directors includes Charles Schwab, Larry Sonsini (Observer), Bob Finocchio and Sandy Robertson.

Law Pivot Inc.


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LawPivot ( is a legal Q&A website that enables companies, especially startups, to confidentially receive crowdsourced legal answers from highly qualified lawyers for a fraction of the cost. Additionally, the site allows lawyers to market their legal services by sharing expert advice and engaging in discussions. 
The company’s Q&A technology utilizes a personalized search algorithm to provide companies relevant lawyers on LawPivot to provide answers to their specific legal questions. LawPivot eases the burden on companies in finding answers to their legal questions in an easy and affordable way.
Headquartered in Palo Alto, CA, LawPivot is funded by Google Ventures and prominent angel investors.  To request a free invitation to use LawPivot, please visit




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ChaCha answers who, what, when, where and why, and has emerged as the No. 1 way for advertisers and marketers to engage their audience. Through its unique “ask-a-smart-friend” platform, ChaCha has answered nearly one billion questions since launch from more than 15 million unique users per month via SMS text (242-242™), online (, Twitter (@chacha), Facebook app, iPhone app, Android app, and voice (1-800-2-ChaCha™). Working with major brands such as Paramount, AT&T, Palm, Johnson&Johnson, P&G, Coca-Cola, McDonald’s, Sonic, and presidential political campaigns, is one of the fastest growing mobile and online publishers according to Nielsen and Quantcast.

ChaCha was co-founded by proven innovator and entrepreneur Scott Jones and is funded by VantagePoint Venture Partners, Rho Ventures, Bezos Expeditions; Morton Meyerson, former President and Vice Chairman of EDS as well as Chairman and CEO of Perot Systems; Rod Canion, founding CEO of Compaq Computer; the Simon family; and Jack Gill, Silicon Valley venture capitalist.