Update: Making Money Online With Mahalo

Yesterday, I have received an email from Jason Calacanis, Founder and CEO of Mahalo dot com. If you have been using Mahalo to make money as I have suggested on these two previous posts, Make Money Online With Mahalo and this one, then this announcement will be of great interest to you.

Essentially, Mahalo is going over a major change with its original model. Jason admitted that the current model is not working well and actually failed in practice (takes guts to say that). After many considerations, the Mahalo team decided that the change is warranted and effective July 1st, will be working differently from how it previously was.

Here is what Jason had to say:

“Our goal at Mahalo is to build a high-quality content and community destination – one that delivers information our consumers can trust.  To do this, we need talented, motivated writers.

For the past year, we have experimented with a writer-compensation method that shared revenue from our pages.  While the revenue sharing system seemed entrepreneurial and fair in theory, after careful examination including getting your feedback, we’ve concluded that it failed in practice.

We heard your feedback about huge variation in writer compensation that was not directly tied to quality, and about the confusing nature of Mahalo dollars.  In short, the system created a happy few and a frustrated many.

So, starting on July 1st, we are moving to a more traditional flat-rate payment system, with incentives based on quality and traffic.

Here’s how it will work:

1. On July 1st, Mahalo will stop revenue sharing on topic and “how to” pages, and shelve the concept of vertical and page management.  Revenue sharing on Mahalo Answers will continue.
2. All Vertical Managers will be offered Guide or Senior Guide roles based on their tenure and performance as Mahalo consultants to date. Guides will receive $1,000 a month for their content and Senior Guides will receive $1,300.
3. Page Managers and Go Team members will be given the ability to apply for one of 50 new Guide positions, paying $1,000 per month.
4. All Guides will be responsible for 25 new pages, 12 hours of updating (i.e. on the Go Team), and 10 questions or answers weekly. You will be able to do this work whenever you like so you can easily schedule it around your other writing obligations!
5. NEW FEATURE: We’re moving payments of Guides to – wait for it – weekly!  The week after you perform your work you will get your PayPal payment. This was one of the most requested features from our writers and we’re thrilled that our new flat-rate system will make this easy to implement.
6. NEW FEATURE: Mahalo Dollars will be removed from page management and creation. You will not have to worry about the conversion ratio anymore! Mahalo Dollars will be limited to Mahalo Answers where folks love them and the fun stuff they can buy with them. You’ve told us that real writers wanted to be paid in real dollars and we’ve listened. No more conversions!  Everyone will have 31 days to cash out their Mahalo Dollars (cash outs can occur anytime in July – no cash outs as of August 1st).
7. Mahalo Dollars will only be used in the Mahalo Store going forward. No more cashing out for real dollars (gift cards and donations will still be available).
8. NEW FEATURE: A group traffic incentive of $100 each will be shared between Guides for every month that Mahalo breaks the previous month’s traffic.
9. NEW FEATURE: A group revenue incentive of $100 each will be shared between Guides for every month that Mahalo breaks the previous month’s revenue numbers.
10. NEW FEATURE: A quality incentive will be given to a selection of pages and Guides each month based on our Community Team’s judgment.”

There you have it. That’s an awful lot of changes and I am sure many will reconsider if it is still worth the while being on Mahalo. In my case, I will probably let go of Mahalo as unfortunately, I do not believe that I will have the time required to be a guide (see item 4 above). For those who have the time, I think that it is worth the shot and you should hurry and apply for being a guide quickly, as I am sure that there will be a flock of interested users going after this opportunity. In any event, AdSense revenue share will still continue for questions and answers, and this one, I’ll probably continue.

To apply, find more about these changes and see the reaction from current Mahalo users about this announcement, you can visit the official thread here.