The great margin mystery. How does ChaCha answer any question for 10p?

Opinion

The great margin mystery. How does ChaCha answer any question for 10p?

Britain's mobile operators aren't always as creative as they might be when it comes to making money out of existing services. They fret about 'delivering OT content' when they already have services that go unexploited.

Text information services are a case in point. Up until now the market's been dominated by two players, TextPerts and AQA. The latter charges £1 for every question it answers by text. The latter charges £1.50! Well, it is owned by the men with moustaches.

Now a new entrant has entered the market. ChaCha charge 'the standard rate for texts' (I've always wondered what that is) which, in their case, comes to around 10 to 12 pence per query.

To test them, I texted them three queries of varying difficulty, and to their credit they answered in minutes. 

'What is a Croydon Facelift?' came back almost immediately. 

How on earth do they make money though? Even if they bought some impossibly cheap minutes, the margins on each transaction must be pretty slim.

They claim to have 60,000 highly-trained human fact finders - and highly trained people don't come cheap (unless, of course, they're exaggerating that bit).

There are no adverts on each text that I could see, so how are they doing it? Are they selling details about our queries? 

TEST: HOW THEY PERFORMED

We tested ChaCha's speed and professionalism with these questions:

1. If we all held up a mirror and directed the sun's rays in one direction, could we fry Piers Morgan like an ant?

2. How much power, on average, does a Cornish wind turbine generate?

3. What is a Croydon Facelift?

Answers 1 and 3 were provided within a minute. Answer 2, which was trickier, only took slightly longer (but was obviously taken from standard  figures for wind turbines, so was effectively meaningless, arguably)

Still, for 10p a question, it's not bad. Have you tried AQA or TextPerts recently?

This was first published in October 2011

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