I've been wondering when this generation of Web companies would come up with an answer to Flooz and Beenz, the made-up Internet currencies of the dotcom bubble. How foolish of me not to realize that Calacanis, who has recycled so many other ideas (Web directories, wikis, crowdsourcing) in his failed quest to create a successful Web business, would be the one to revive this failed idea.

If you don't recall Flooz and Beenz, they were made-up currencies that websites could use to reward users, who would then spend them on real online purchases. Both went under in 2001, leaving their means of exchange worthless.

Mahalo Dollars have a more limited purpose: People with questions they're too lazy to Google can buy Calacanis's fake money with real coin, and then pay freelance Internet researchers to answer their questions.

The pay-to-search business is a lousy one. Google, which tried a similar scheme with real money, gave up on it last year. ChaCha, a Midwestern startup pursuing a similar idea, has had no apparent success.

I'm sure Calacanis will make some money in the short term by skimming currency-exchange fees from the suckers he gets to sign up. Eventually, the currency will collapse faster than the Indonesian rupiah did in the '90s. But by that time, he'll be on to some other scheme.

Jones makes this argument for the service's proposition:

They can either make you work at search, or we can give you the answer. Which do you want as you're driving down the highway?

This is the problem with rich entrepreneurs: They're out of touch with their customers. 99 cents may be nothing to Jones, a millionaire with a Midwestern mansion. But for those of us watching our pennies, why would we bother? ChaCha's new mobile service targets the idle rich: People, like Jones, who are used to making other people perform menial tasks.

In general, IU restricts the ability to place advertising on [university] websites. This policy allows IU to present a comprehensive and recognizable visual identity on the Internet without interference from external source providers.

The startup has released a Star Trek-themed search toolbar for Web browsers. Every search made through the toolbar means a donation to the production of Star Trek: New Voyages. The fan series is better-produced than the original series it honors, but it cranks out episodes at a glacial pace: three episodes in as many years.

We doubt there are enough hardcore Star Trek fans to make a real difference in ChaCha's numbers. An easier explanation? Scott Jones, ChaCha's CEO, has to be a Trekkie himself to be pursuing this. I hope the citizens of Indiana are happy knowing that their tax money is funding Jones's geek obsessions.

The services that ChaCha is adding to its search engine is search via text and voice over telephone devices. Hardly a novel concept. It's essentially 411 with operators searching Goo — sorry, ChaCha for results. So why did the cash-strapped state provide the millionaire with a couple more million?

It certainly doesn't hurt that close friend Governor Mitch Daniels, whom Jones has helped raise a million dollars for his reelection bid, is the Chairman of the Board for the IEDC.

In fact, Scott Jones scored twice. His other company, Precise Path Robotics, which builds robotic golf-course mowers, received just less than $2 million as well. For what purpose? To improve the existing robot's precision "[u]sing an innovative positioning system that surpasses GPS." (No word on whether Precise Path is launching satellites, but I suspect its innovative positioning system is as sophisticated as operators providing search results over the telephone.)

Fortunately for Jones, there are few competitors in Indiana for technology-related funds, and he has all the right friends. Which is, as everyone knows, always the best business plan, whether you're in Indiana or Silicon Valley.

We've learned that Hinnefeld, referred to as the "IU watchdog" for the Herald-Times, left the newspaper for a media relations position at ... Indiana University. Surprise, surprise. It's reassuring to know that Nick Denton isn't alone in hiring his critics. When Owen Thomas tires of me writing about ChaCha, I look forward to a comfy desk job in lovely Bloomington, Indiana.

The Fortune piece includes the tale of how ChaCha came to be:

The trigger to launch ChaCha came when Jones was preparing a speech for the National Academy of Sciences at Stanford in 2005. To fill in some technical gaps in his talk, he phoned several venture capitalists and technology experts for help in tracking down information. Each pointed him to a specific website. "I thought, 'Holy s—-! I can actually do it now! If I recruit an army of experts, I could actually do what I was considering doing 20 years ago.'"

Wheeler said the potential for the partnership struck him when, writing a speech, he struggled to track down a vaguely remembered quote. He was impressed when IU's Ask a Librarian service found the quote, from former Harvard President James Bryant Conant, within hours. But a ChaCha guide got it in two minutes.

"That's where my head about exploded," he said. "I realized this is our core problem for the 21st century."

Jones is a millionaire inventor. And I suspect he's equally good at inventing the story behind his company. He almost has me believing that if there were more public speakers in the world, maybe ChaCha would actually have some users. That is, besides those students forced to use ChaCha because their university's president is buddies with Jones.

Jones has already cut his own $100,000 check for Daniels's campaign and says $750,000 of the million-dollar goal is already committed. Jack Gill, an early ChaCha investor appointed by Governor Daniels as an Indiana University trustee, counts among the contributors with his own substantial donation. Likewise, John McIlwraith, managing director of Cincinnati-based venture capital firm Blue Chip Venture, also a ChaCha investor, is among Daniels's supporters.

McIlwraith, on his support for Daniels:

As far as governors who seem to get it when it comes to creating the right environment for high-growth tech companies, he's high on the list. If Indiana is successful, it will give us more investment opportunities. It feeds on itself.

The only real question, though, is whether Daniels's ties to ChaCha count as a political benefit. Indiana Democrats hope to portray Mitch Daniels as out of touch with the average Hoosier and in the pocket of fat-cat businessmen. Shouldn't be too difficult, since we suspect the average Hoosier uses Google.

The Herald-Times wrote:

The lesson here is not that there was anything legally or ethically wrong, at least until such evidence surfaces, which it has not. Rather, it is one of recognition of situations and of McRobbie's changed role... Aggressive disclosure that spelled out any and all connections — even ones that seemed coincidental or even accidental — could have gone a long way to blunt the thrusts of critics.

To the editor:

Your Aug. 12 editorial, "Aggressive disclosure would clear air about IU dealings," left me wondering, what's your point?

It was unfortunate that Indiana media gave credence to the innuendo and inaccurate statements about the IU-ChaCha alliance that were anonymously posted in a self-described Silicon Valley "tech-gossip rag." The fact that no one by name stood behind these statements should have been a tip-off as to their veracity.

In response, McRobbie immediately disclosed all details of his involvement with ChaCha, and they were publicly reported. He resigned from the ChaCha board before taking over as IU president. He gained nothing from ChaCha. The only potential beneficiaries in this deal are IU and the people of Indiana if ChaCha catches on and becomes another successful Indiana business.

It sure looks as if someone in California is not happy that IU is getting together with Scott A. Jones, one of the tech industry's most successful innovators, to develop what could well be a much better Internet search engine than anything up to now. It should be welcomed by all who want Indiana to prosper. If someone in California doesn't like it, and whines about it anonymously on the Internet, we should ignore it.

-LEE MARCHANT, Bloomington

• My Valleywag posts were not anonymous, and I stand behind them.
• I am not in California — if I'm in California, then Bloomington, Indiana is downtown Palo Alto. Moreover, half of my family lives in Indiana!
• The only "inaccurate statements" reported here were made by Indiana University vice president Brad Wheeler, to the press, and by ChaCha in its SEC filings.
• McRobbie did not immediately disclose his involvement with ChaCha. He allowed Wheeler to speak, incorrectly, on his behalf. A ChaCha PR flack further muddled matters in a statement left in a comment on Valleywag. Valleywag and others questioned those statements, and finally McRobbie chose a consistent story (subscription required), though one that differed from previous tales told. Plenty of questions about this deal remain.
• The information ChaCha publicly disclosed in an SEC filing was false, a fact conceded by the company when it stated its intention to refile the document.
• It's absurd to suggest McRobbie gained nothing from ChaCha.
• And even more absurd to claim the primary beneficiary of this deal is not ChaCha and its shareholders.

Unsurprisingly, like ChaCha, Lee Marchant has benefited from close ties to Indiana University. Marchant received an oversized check for $25,000 in March from Indiana University for his "community lobbying effort" to keep a local military base, also tied to the university, open.

No wonder Mr. Marchant would prefer to ignore our coverage of goings-on in Bloomington. It doesn't fit with a booster's fantasy world view, where every deal is above board, and the ethics of every local notable are above average.

The house also sports a 2,700-gallon salt water aquarium, a home theater that trumps commercial movie venues, a Web-enabled wine cellar that keeps itself stocked, automated dog-food dispensers, a mahogany slide that took a year and a half to build, an indoor treehouse, a secret passage triggered by a Harry Potter book, and a waterfall shower in the master suite that gushes 300 gallons per minute. Apple board member and noted environmentalist Al Gore would not approve.

Steve Wozniak's 7,100 sq. ft. Los Gatos home, by contrast, is a quaint bungalow at best. Sure, it features "a children's discovery complex, an arcade, a cave (designed to look real by experts from the California Academy of Sciences ) and a pet hotel." But those hardly compare.

Scott Jones, with this house, has launched himself firmly into Michael Jackson Neverland territory. How does the CEO of an also-ran search engine afford such a spread? I'm sorry, did I fail to mention that Jones's first company, Boston Technology, invented voicemail, and that he runs six other companies in addition to ChaCha, including Gracenote, the music directory used by many services, including Apple's iTunes?

All of which raises the question: Why, with all his wealth, does Jones need Indiana University president Michael McRobbie, a former ChaCha board member, to oversee a deal in which IU librarians and IT staff are forced to volunteer their time on ChaCha?

Watch Indiana's RTV6's video tour or view the slide show.

As of May 31, Gill was listed, like university president Michael McRobbie, on ChaCha's board of directors (PDF). His appointment as trustee came on the same day IU and ChaCha announced their partnership. But you wouldn't know it from reading the Herald-Times — even though Steve Hinnefield, the same reporter who followed up on our story wrote about Gill's residency troubles.

Hinnefield writes, "Gill is getting positive response for the skills and experience he brings to the board of trustees." He fails to note the "positive response" is coming from ChaCha founder and CEO Scott Jones, whom Hinnefield merely identifies as "an IU alumnus and Indiana technology business leader." Here's what Jones has to say about ChaCha board member Gill:

I think it really helps our board of trustees to have someone of that stature, and someone that progressive. He's a visionary thinker about education in general.

The reporter does end the story by giving Gill space to endorse new IU president and extremely recently former ChaCha Director Michael McRobbie. Gill claims he didn't even want to be a trustee; it was the attraction of working with McRobbie (again) that swayed him:

I think he's the right man for the right job at the right time. I just think he's a very insightful, decisive, dynamic yet sensitive leader.

When critics observed that McRobbie was a board member of ChaCha, Brad Wheeler, IU's vice president of information technology, claimed McRobbie had resigned his board position on March 1 when he became president-elect to avoid any impropriety.

But three months after McRobbie supposedly resigned, ChaCha filed a Regulation D statement with the Securities & Exchange Commission — a requirement imposed on private companies when they register shares — that stated (PDF) McRobbie was a member of the board as of May 31.

Is Wheeler lying? If so, it's a stupid lie, one easily discovered, and a lie that will only increase scrutiny of the university deal. And it's a lie that does little to change the appearance of conflict, since McRobbie had been working as an executive overseeing IT and research at the university for years — roles which would have been central to any search-engine deal the university struck.

There's another possibility, one far worse for the company than a mere conflict of interest. Wheeler's statement could be accurate, and ChaCha's filing with the SEC could be false. In which case, Dean Burger, ChaCha's CFO and general counsel, would have lied to the SEC when he signed the filing and certified it as factual and true. And that scandal would spread as far as Seattle, since Jeff Bezos is also an investor in the company, and as the CEO of the publicly traded Amazon.com, hardly needs an SEC investigation coming anywhere near him.

And this all reminds us why "human-powered" search engines will never take off. As annoying as Google's robotic algorithms are, they never pull this kind of nonsense on us.

ChaCha: Needs lessons
Twist: "A smart search engine that 'learns.'" Harnesses power of humans (somehow), which is odd, because I thought we invented computers to do just this sort of thing.
Hubris: "A smart search engine that 'learns;'" refers to "first generation search engines." You know, like crusty old Google.
Results for "house": Decent results including the TV show, the legislative body, and real estate. (So does Google.)
Status: At least it's live, and the site's pretty.
Chance of success: 200/1. Not revolutionary, not scalable, and rough Alexa stats show it's not catching on. Hell, even Valleywag's in better shape.

Search Wikia (née Wikiasari): Today Britannica, tomorrow the world
Twist: Open-source search engine by Wikia, the company of Wikipedia founder Jimmy Wales, contrasts with the "black boxes" of Google and Yahoo.
Hubris: CEO says Wikia wants 5% of the search market. Wales: "The idea that Google has some edge because they've got super-duper rocket scientists may be a little antiquated now." Also: "Search...is broken."
Results for "house": Well we have to build a search first, no?
Status: Much-hyped, but the actual site is just a placeholder-style wiki page.
Chance of success: Five percent share? 30/1, if Wikia actually sticks with the project. Look at this this way: director Quentin Tarantino talks about a million projects before he finally makes one. Of course that one kicks ass, but don't get fooled into thinking the others will ever see daylight.

Tall Street: Will break when popular
Twist: Users can rate search results on a 1-5 scale. Through a stock market, they can also bet play-money that a site will get clicked when it's in certain search results.
Hubris: The intro page says Tall Street wants to "help out the little guy;" philosophical statements; needs a dedicated community.
Results for "house":
Status: Still the little guy. Hadn't heard about it until the founder e-mailed us. If it gets popular, won't armies of users from massive sites easily game it?
Chance of success: 5000/1. Maybe it'll show up in a sidebar in Wired: "Eight search engines that could be the next Google."

Powerset: Pay no attention to the man behind the curtain
Twist: Natural language search: Like what Ask tried to do, but with a computer parsing the questions instead of humans hard-coding answers.
Hubris: Creators brag that everyone loves the demo. Raised $12.5 million last year.
Results for "house": Powerset isn't live. But if it were, it'd probably want a question like "When is House on?" or "How much is a house in Tampa?" Then, we're told, it'd give an answer, not a list of sites with the phrase "When is House on" in them. (Yep, that's all Google gives.)
Status: In demo. Testers say it's great? Then put it in beta.
Chance of success: 5/1. So much could go wrong, but Powerset is the one engine with a good shot at making search feel good. The two tricks: getting the system to work without constant embarrassing mistakes, and getting people to ask questions like humans again. (The latter assumes we know what we want to find.)

Snap: Honey I blew up the widget
Twist: Visual search shows previews of sites. Of course, this slows down the search site, which also features an annoying drop-down that guesses your search term as you type (oh boy, I saved 0.6 seconds typing and wasted 2 seconds using the drop-down). Snap also makes uses these link previews for the annoying bubbles that pop up when you hover over links on some widget-happy blog. Did you really care what the site looks like when shrunk to 300x500 pixels?
Hubris: Slogan is "The other way to search;" About page calls Snap "the next great search engine;" led by big-swinger, big-misser Bill Gross and his incubator Idealab.
Results for "house": Result #4 is "sponsored." Read: spam. Overintegrating paid results is a throwback to the terrible pre-Google days; site previews are often outdated or missing, and the whole page runs slow as hell. Plus it's apparently running Ask's search.
Status: Fully deployed in its bloated (but slickly wrapped) glory.
Chance of success: 100/1. Snap has enough business momentum to wallow around until someone buys it to harvest the pieces. The preview feature could be useful, but it sure ain't a Google killer. (Disclosure: Snap recently sponsored a party for which I helped build the guest list. Sorry dudes, prose before hoes.)

Eurekster: Others searched for "WTF?"
Twist: Community-powered search. Hold on to your butts, this is gonna get bumpy: Eurekster powers "swickis" that live on different sites. You can find a swicki by visiting a site that has one, or by searching Eurekster's list. Then search for a term within that swicki. Or pick a term from the "buzzcloud," which shows what others have searched — not that you need a suggested term if you're already looking for a particular term.
Hubris: Eurekster's front page has four award badges, seven press quotes, and no search box.
Results for "house": First result in the swicki list is a substance abuse search engine by Aloha House. Okay, let's go there and search "pills." Decent results! Of course, there are all these mysterious buttons, bubbles, and paragraphs on either side...
Status: Over 50 thousand swickis deployed, including spam and weirdly specific topic areas.
Chance of success: 400/1. Again, some useful technology, but confusing implementation that makes for an awkward search experience. The goal isn't to make search tougher, guys.

Hakia: Yeah she ugly, but she sure can cook!
Twist: Clusters results into categories, guessing what a search means.
Hubris: It's "the Web's new 'meaning-based' search engine." Except for, you know, the other ones. The CEO asks, "Are we the Web's equivalent of the first color TV?"
Results for "house": Impressive! Headlines about the HR and White House, then a string of categorized links to "House, M.D." information: show profile, episode guides, fan sites, and more. A shame the ads drew a different conclusion and showed me real estate ads. But what's this little face at the top asking bot-like questions? And does every result page really need an "e-mail this page" link? "Gee, you know my friend Sarah would sure enjoy this search result list!"
Status: "Beta 13." At public revision 13, maybe you can give it a real version number. In any case,
Chance of success: 50/1. Hakia is actually pretty neat, and it could eventually form part of a larger, slicker search engine. You know, like Powerset.

Freebase: At least the verb is fun
Twist: It's actually a collaboratively edited database. Judging from screencaps, it feels a bit like Wikipedia but bigger.
Hubris: Actually reasonable, even if it claims the goal of turning the whole internet into its database. All the hype's coming from outside sources like think-tank owner Tim O'Reilly.
Results for "house": I'm not on the exclusive user list, so I'll just have to wait to find out. Guess that screws up my search-turnaround-time stats.
Status: Private alpha.
Chance of success: Define "success." Will it go as big as Google? 60/1. Will it prove useful? 1.2/1.

(What will replace Google? Maybe a retooled search from someone like Ask.com, or a hacked-up tool from three guys in Russia that no one's heard of. But my money's on the Balkanization of search, in which users check Wikipedia, Yelp, or Flickr for specific types of searches. No wonder Google made sure to corner the two prime search niches of maps and video.)

Nick Douglas writes for Valleywag, Prezzish, and Look Shiny. Google him.