Just back from a business trip to Europe and Asia, Mahalo CEO Jason Calacanis has decided to make some cuts, firing nearly 10% of the staff and has started to rent out space to other startups. From what we understand, the rentals started earlier as Techcrunch50 finalist CauseCast has been renting space for a while. It’s good to see Jason took my advice from last week.

The staffers who were fired today are absolutely the best of the best. In London at FOWA, Calacanis explained that he only hires the top, best possible talent. This should probably help the fired staffers with future job inquiries. Good luck to all of those who lost their jobs at Mahalo today and if I can be of any help, send me an email.

One of the questions I’ve wondered about and have been asked for my opinion a number of times over the past month is whether the startups that are firing staff are doing it because of the economy or because their business model concepts or actual ideas are the real issue. It’s a very difficult question to answer without getting a look at the information from the inside. I posed the question on Twitter and was pointed to Jonathan Gheller who recently closed his startup Fashmatch. He notes that it wasn’t the economy that pushed them to close.

I certainly can’t say which reason is at fault for Jason’s decision to fire staff today. I can only assume it’s economy related based on the fact that his entire team are the highest delivering employees possible. 

My view on Mahalo is the same as it was day 1; to be successful they will need certain pages to drive the large share of revenue. While ads on the site now mirror exactly the other links on the page (this may actually confuse visitors), will that be enough to drive users to click on the ads? And how much does a page require to break-even? I’ve also started to see an overall drop in Mahalo’s standings in Google. What used to be instant page 1 status now has been pushed further back. Mahalo has $20 million in funding so they have some runway to continue to refine their business model as they continue to grow.

Mahalo Daily, the video show, also appears to be declining in viewership even with their SEO titles and excellent thumbnail work.

Ashkan summarizes the Mahalo business model:

Mahalo’s traffic strategy right now is simply to jump on the latest, breaking news, publish a page on it, and hope that Google’s super quick spiders index their page… It’s a gimmick, not a worthless one, but not exactly priceless either.

There’s been chatter about more Mahalo positions moving overseas. Our sources tell us that Jason has opened an office in Manilla. I don’t want to speculate on what positions are located there yet - we are still waiting for some final confirmation. We were provided this photo which was shot by a Mahalo staffer of what appears to be (unconfirmed) the Mahalo team in Manilla. I count 25 people in the photo.

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Hosting company Rackspace has announced that they have acquired Slicehost and Jungle Disk today. Rackspace also has launched their overall cloud computing strategy at an event in Austin. In addition, Mosso, our host, has been renamed to "Rackspace Cloud Hosting". Here are the details on the cloud computing strategy for Rackspace:

• Cloud Sites– Rackspace’s flagship cloud offering, The Hosting Cloud, is now Cloud Sites. Developed by Mosso, Rackspace’s cloud division, it offers a scalable platform for handling huge traffic spikes and a pay-as-you-grow pricing model. Cloud Sites is a heterogeneous environment, supporting both Windows and Linux.
• Cloud Files — Rackspace’s internet-based storage service, CloudFS, is now Cloud Files. Cloud Files gives developers instant access to an enterprise-grade storage infrastructure and reduces overall investment and IT costs while providing infinite scalability. Cloud Files offers an industry leading SLA and a highly competitive pricing model with replicated storage starting at $0.15/GB. Also later this year, Limelight Networks will team with Rackspace to allow developers to easily distribute content to millions of end users around the world and bring scalable content delivery and application acceleration services to the masses. While continuing to support the Amazon S3 platform, Jungle Disk will port to Rackspace’s Cloud Files system in the coming months. Jungle Disk comes in both desktop and workgroup editions across the Windows, Mac and Linux platforms.
• Cloud Servers — This new hosting solution, which will deliver on-demand server capacity to businesses of all sizes, will leverage key technology developed by Slicehost, which uses Xen virtualization software. Slicehost will remain as the company’s developer brand, creating innovative new features driven through shared intellectual property in conjunction with development initiatives from Rackspace. As part of the announcement, Slicehost also announced new, larger slices for high performance computing, lower prices as well as IP sharing for high availability computing.

ReadWriteWeb has more information on Slicehost and Jungle Disk. Slicehost has more details on the transaction as well.

Web hosting provider Rackspace has acquired JungleDisk, an online backup service, and Virtual Machine provider Slicehost in a deal designed to help bolster its offerings against top competitor Amazon Web Services. The announced acquisition price is $11.5 million in cash and stock, with the possibility of up to an additional $16.5 million depending on performance.

Jungle Disk is a file storage and backup service that up until now has relied on Amazon’s Simple Storage Service (S3). With the new announcement the company says that it will begin offering the service using Rackspace’s similar service Cloud Files, but will continue to support storage using Amazon with plans to support even more services in the future.

Slicehost offers developers “slices” in Xen-based virtual servers that are much cheaper and generally easier to use than a traditional dedicated server. The service is a direct competitor to Amazon’s Elastic Compute Cloud (EC2).

Earlier this week, I noted on Twitter that every startup should have a press page. A page that includes: logos in multiple formats, short bio of the executives, photos of the team and/or executives, basic stats, contact information and links to other important information. Make it easy for writers to write about you. Check out my post about Peanut Labs - the logo in the post is the only size logo they have on the site. Wouldn’t it be great if I could embed a logo that was on a white background and much larger? What about including a photo of the CEO who I interviewed? Remember that you want to make it as easy as possible for someone to write about you - don’t make them do the work.

Another critical page should be a status page. This page should live outside the network of the startup and should house the current status information for the startup. I don’t care if it’s on a shared blogging platform like Wordpress or SquareSpace, it’s an absolute must.

Known for it’s downtime, Twitter has no public status page. There’s a developer Google group which appears to house some of the updates when the service goes down, but nothing public and so all of the Twitter users are left wondering what’s up. If Twitter had more communication when there are unexpected issues, I think users would be more understanding.

Ning has a decent status page as does our host Mosso. Simple pages that provide customers a "what’s up" with the servers and services they depend on.

Here’s a current example — apparently video message board Seesmic was down last evening. Investor Michael Arrington posted a semi-marketing, semi-rant piece about the downtime where he explains how important communication is between service and its partners. I assume when Mike speaks about his company’s usage of Seesmic, he is actually referring to the 800+ sites using the tool (weren’t they down as well???). Last week, Seesmic partnered with Disqus to push the Seesmic video commenting tool to any sites using Disqus’ blog comment replacement tool. I suggested that it was too soon for a major partnership. The unfortunate thing is that so far CEO Loic LeMeur hasn’t posted about what happened, why it happened and what is being done to make sure it doesn’t happen again. Loic did note that he is working to make sure "it" doesn’t happen again.

As soon as you notice there is an issue, stick it on the status page. It can be something as simple as, "Mooprz is currently down, we are investigating," with a timestamp and a contact form. Once the issue has been resolved, note that as well. After any investigation has completed, come back with an explanation.

I know that when your product is not functioning correctly, you want to get it back working as quickly as possible. The moment you take to update the status page will keep your customers informed on what’s going on and reduce possible emails as well.

In my opinion, having a status page is a sign of trust between a company and its customers. Just make sure to put the status page outside of your network so if the network is down, the status page is still up!

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Cloud hosting provider Mosso (part of Rackspace) is announcing the launch of CloudFS today in private beta. CloudFS is similar to Amazon’s S3 simple storage offering. Pricing will start at at $0.15 per gigabyte, upon release, including replicated copies for data protection. The CloudFS pricing appears to be a bit less expensive than the new Amazon S3 pricing.

One of their slides states, "No charges for incoming or outgoing bandwidth for Rackspace and Hosting Cloud customers." My guess is this means that file transfers won’t incur charges but bandwidth usage will still be charged. I have a confirmed call with Rackspace at 10am and will update this post accordingly.

CloudFS is available as both a standalone service or as part of Rackspace/Mosso hosting packages. If you want to apply for the private beta, complete the application here.

For this new file sharing service to compete with Amazon, they will need to "woo" developers over. A little bit of a cheaper price won’t be enough. Amazon recently changed their support model to offer paid premium support. With hosting being a commodity, support can be a major differentiator. While my review will come later this week (see below), so far the quality of support personnel that Rackspace/Mosso offers has been very high. I have been impressed with the knowledge, intelligence and easy-to-understand people they have on the support team.

CenterNetworks is currently using Mosso (for the past six weeks) and my review will be posted later this week. The twitter version is that the first two weeks were a complete disaster, since then it’s been solid. I’ve had good conversations with the Mosso founders over the six weeks and my review will cover everything. Grab the RSS feed to be instantly notified when the review is live.

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