VentureBeat

Collarity, a company that helps monetize websites by monitoring user activity, is raising a second funding round of up to $7.8 million, VentureBeat has learned.

We wrote about the company back in 2006, when its emphasis was on a social search tool that allows site visitors to see what other visitors are interested in.

At the time, we noted that Collarity offers a interesting tool, but we also said the company faces some stiff competition from the hordes of other engines entering the market. Collarity seems to have broadened its focus since then — it still offers social search, but it’s now part of a larger suite of features that includes suggested content, tag clouds and targeted advertising. Websites install the features to gauge users’ activity and try to translate that data into greater traffic and revenue.

Of course, it’s not like website analytics and monetization is an empty field either — last week, for example, NuConomy announced that it had raised $3 million to compile and connect data about what every user is doing on a site (our coverage) — but Collarity seems different because it’s actively engaging with users through its different features. In an interview with VCCafe, Collarity chief executive Levy Cohen outlines a few other things that set his company apart: the fact that it’s easily-installed web service and that it’s free. (Cohen also notes that initially positioning Collarity as a social search engine was a mistake.)

The Palo Alto-based company has partnered with customers including Fox Networks and the Spanish-language V-Me networks, and unveiled a web video monetization tool last month.

The round is led by Amicus Capital in San Francisco and JC6 in Israel. Collarity declined to comment on or confirm the funding.

Wikia, the San Mateo start-up founded by Wikipedia’s Jimmy Wales, is working on a search engine that will use the same strategy as Wikipedia’s user-reliant encyclopedia.

The project is secretive, but has a preliminary launch date of the first quarter of 2007, the Times of London reports.

Wales says Google’s flaws have become more apparent:

Google is very good at many types of search, but in many instances it produces nothing but spam and useless crap. Try searching for the term ‘Tampa hotels’, for example, and you will not get any useful results…

Of course, Wikipedia’s reliance more than a thousand of human administrators has its own problems, such as human bias, so there will be no perfect fix. And there are plenty of other so-called social search engines that have already launched with varying strategies. VentureBeat recently reported on Yoono and Collarity, for example. There are ton of others. Just look at the Firefox recommended add-ons; about half of them have some sort of social search feature. And Yahoo could do a lot more with its social features (Delicious, Flickr and others), as Fred Wilson notes.

The idea is to have humans lend a hand in judging what sites should appear in search results. Google relies on computers, used to count things like the number of links a site has — and spammers are taking advantage of it. Among open-source, user-generated sites, Wikipedia has been among the more successful (it has more than 1.5 million articles, and despite its flaws and plenty of critiques, the site has gained a certain credibility). However, it is unclear how Wales’ other site, Wikia, is performing. Unlike Wikipedia, Wikia is for-profit, and it’s not certain how much user loyalty can be generated for such a site.

Wikia recently received a cash infusion from Amazon to help build out its features, as VentureBeat first reported here.

According to the Times, the search project has been dubbed Wikiasari — a combination of wiki, the Hawaiian word for quick, and asari, which is Japanese for “rummaging search”.

The project will reportedly be built on open source search platforms Nutch and Lucene. Techcrunch has more details here.

Collarity is yet another Silicon Valley search engine start-up that wants to personalize your search results.

It does this by integrating things it knows about you — and from your surrounding community — garnered from past searches.

First, a warning: Too many search engines exist • and there will be some pain as most of them die a slow death. The list of ones we’ve written about in just the past few weeks goes on and on • Powerset, Spock, Wink, Like, Thefind.com, Ugenie, Medio • all sporting different flavors, and following the tsunami of vertical search engines that already hit last year. You can never quite tell, though, when one will produce something cool.

So here comes Collarity -• and with financial backing to boot. The 14-employee company started in August last year, and was secretive until two weeks ago, when it put out word it is around. Private individuals have invested “single-digit” millions into the company.

Levy Cohen, chief executive of Palo Alto-based Collarity, said he got his idea to launch Collarity because it bothered him that Google returns the exact same results to people even if they have different interests. If you’ve searched for information on Linux before, then the search engine should return results relevant to open source, he said. Moreover, if you search for “Java,” the search engine should know whether you’re more likely interested in the computer language, or coffee.

Collarity’s personalized search uses what it calls the Collarity Compass. See below. We’ve used a red arrow to point to the compass slider, which is on “global” in this example — it shows you global results for the search “Java,” in other words without any personalization. You’ll note that it clusters results around words, which you can select, and drill down into.

Let’s say you surf on the site Reference.com. Collarity gives you three layers to search: personal, community or global. If you want to search personal, you select that tab (see screenshot below). Collarity has a good sense of your interests — if you have registered, and if you’ve performed enough searches. Collarity may know that coffee is a big interest of yours, and return results related to that theme.

If if you click on the community tab, however, it returns results based on the interests of other people using the site• and in this case (see below), it is the Java computer language. It knows their interests by anonymously tracking their searches. Tabs on the right of the compass let you choose between searching within the site or all of the Web.

Collarity is open for playing with now. It plans to make money by taking a share of revenue that they get from ads.

The company apparently knows the only chance to survive in this cut-throat industry is to strike deals with various Web sites, to showcase its Compass. There’s little chance it will draw much activity on its home page, given the noise out there.

Let us know what you think.