Liz Gannes

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Mahalo Lays Off 25 Percent for Shift to Apps From Video

Mahalo, the often-pivoted company run by well-known entrepreneur Jason Calacanis, laid off a quarter of its staff earlier this month.

Jason Calacanis

Mahalo President Jason Rapp downplayed the move in a phone interview with AllThingsD, saying it was part of a transition from cheaply churning out gaming videos in the style of Machinima.com to making educational iPad apps like Learn Guitar.

The layoffs eliminated 18 employees, leaving Mahalo with a headcount of 49, Rapp said. They happened on Oct. 5.

These aren’t the first layoffs for Mahalo. The company had 102 employees in February of this year before making layoffs spurred by Google’s “Panda” update, which downgraded content designed to rank highly in search results. Mahalo was even larger a few years ago when it focused on building its own search alternative, Rapp said.

Rapp noted that while Mahalo’s videos get 30 million views per month, they are not necessarily profitable based on YouTube ads. Educational iPad apps, by contrast, seem to be instant money makers, because users will pay for them. Mahalo plans to gear up to release one app per week, though it only has four out so far. It will also continue to make educational videos.

Mahalo, which is backed by Sequoia Capital, News Corp. and CBS, soon plans to move its headquarters to Culver City from Santa Monica, Rapp said, and it has $5 million of funding in the bank to fuel its shift to instructional content.

Calacanis photo by Flickr user eirikso.


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