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ChaCha Search Inc. has laid off 28 of its 44 employees since Friday, company co-founder and CEO Scott Jones confirmed Monday evening.
The Carmel-based question-and-answer service cut its 18-month-old social media division, Social Reactor, which paired advertisers with celebrities and other people with massive social media followings. The celebrities created content and drove traffic to advertisers. Most of the ads were Google Ads.
Earlier this month, Google’s algorithm for determining advertising rates reduced Social Reactor's rates by about 80 percent, Jones said.
“A week ago, we woke up to see our advertising revenue dropping through the floor,” he said.
The steep reduction in revenue meant Social Reactor was no longer sustainable, so ChaCha shut down the program.
Jones said the company made the move so it "could position ChaCha Q&A to be profitable."
"There was no impact to our ChaCha Q&A business, which has been stable and steady," Jones said in an email to IBJ. "The remaining staff is now fully refocused on the Q&A part of our business at ChaCha.com and via our iOS App."
ChaCha has had ups and downs since it was founded in 2006.
Investors have poured tens of millions of dollars into the firm, with the most recent infusion of funding being $14 million in early 2013.
But the company has had to compete against a trove of other Internet information services, such as Quora.
ChaCha had already trimmed positions, largely through attrition, before the most recent job cuts.
Jones and a handful of other industry experts hinted last year that one of the best avenues for the company would be an acquisition by Apple as it looks to improve voice service Siri’s search results.
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