ChaCha, a search engine with human guides under the hood, on Wednesday said it landed $8 million from former Perot Systems CEO Morton Meyerson.
The Carmel, Indiana, company also received a $2 million grant from Indiana’s 21st Century Technology Fund, giving ChaCha $10 million on top of a $6.5 million first round led by Amazon.com CEO Jeff Bezos in 2006.
ChaCha offers a standard search engine, but it gives users the option to tap an army of about 15,000 guides to provide free live chat designed to help zero in on information. Still, founder and Chief Executive Scott Jones said the company will begin to hit its stride only in 2008, when it launches a mobile search service that uses human guides to answer questions via voice, text message, or mobile web.
“We don’t think first-generation search engines have back ends amenable to that type of service,” he said. “The first guys got it right at the desktop. We’re saying in mobile, we’ve got a better back end."
Google and Microsoft have pushed out voice services that let mobile subscribers seek information, but Mr. Jones said ChaCha mobile’s human guides will provide a full menu of information, from sports scores to the location of a good Thai restaurant in a particular locale.
Other first round investors included Rod Canion, founding chief executive of Compaq and Jack Gill, founder of Vanguard Ventures and now partner at Maven Ventures.
Mr. Meyerson is the former president of Electronic Data Systems and chairman and chief executive of Perot Systems, both founded by former presidential candidate H. Ross Perot. Mr. Meyerson’s investment firm, 2M Companies, has invested in companies including Cozymel’s Mexican Grill and web radio company AudioNet, which staged an initial public offering as Broadcast.com and later was acquired by Yahoo.
Like ChaCha, Mahalo.com, backed by Sequoia Capital, News Corp. and PayPal founder Elon Musk, uses people in its search engine. But Mahalo takes a different slant, using a staff to organize pages based on popular pre-packaged searches.
“There’s hardly any overlap,” Mr. Jones said. “Their strategy is very much an SEO [search engine optimization] strategy. They have a thimble full of guides compared to our ocean of guides. Their guides are making a page really pretty for ‘Britney Spears’ or another heavily searched term.”
ChaCha, with about 50 employees, gets revenue from online advertising, though Mr. Jones said the company has yet to decide on the shape of its mobile business model.
The company’s central technology—knowing which question should be directed to which guide—is shielded by two dozen patents, he added.