More money for search, this time it's ChaCha

Chris Caceres · March 18, 2009 · Short URL:

ChaCha raises $12 million in equity financing and lays off 25 employees

There’s good news, then there’s bad news.

The good news is money has been going around for search services.  A few days ago, Hunch raised $2 million for its online decision search engine.

Today, SMS mobile search company, ChaCha, announced it has raised $12 million in equity financing.  No shareholders have been disclosed as of yet.

The bad news – ChaCha also announced it is, “streamlining and restructuring itself to preserve its cash.  The company is reducing headcount, overhead, and expenditures through a series of cost-saving actions to ensure the company is positioned for long term success.”  In harsher words, ChaCha will be laying off 25 of its 81 employees, according to this report, contributing to the further decline of our economy.

ChaCha, which was launched in January of 2008, allows any person to search for answers to lifelong questions via SMS, such as, “What is a snickerdoodle?”  The question gets routed to ChaCha’s most “knowledgeable” person on the topic, and texts the user back the proper answer, along with an advertisement.  The service is free, but standard text messaging rates apply.  Try it out by texting, 242242, which  spells ChaCha.

Mobile advertising, is the business ChaCha is in.  Along with the answer to the snickerdoodle question, users receive an advertisement for what brand to buy this snickerdoodle from.  To date, ChaCha has worked with top clients like Palm, Coca-Cola, McDonalds and even the Obama Campaign.

ChaCha reports that they deliver 30 million impressions per month and has held 3.6 million users since it launched.  

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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.

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