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When the guy behind Wikipedia launches a search engine, the world is going to watch. And watch they did when Jimmy Wales unveiled Search Wikia in January — perhaps a little too closely. I say that because while some were expecting to see a “Google-killer“, the site we saw was a bare-bones engine in the very early alpha testing stage.

But now, it’s getting closer.

I got a chance to play with some of the upcoming changes coming to Search Wikia. Those hoping for a more Wikipedia-style approach to search results will not be disappointed. You can test some of these features out for yourself at this link, but be forewarned that this is a testing site that may experience performance delays and bugs.

The main page is still something you’d expect on any engine, a search box. It’s after the query however that things get interesting. On hover of each result returned you have the option to ‘Edit’, ‘Spotlight’, ‘Comment’ or ‘Delete’ the item. Lets run down these options:

Edit: As you’d expect, you click this and you can directly edit both the title of the result and the paragraph explanation that resides under it.

Spotlight: Allows you to highlight one result on a page, giving it a yellow background to make it stand out.

Comment: You can leave messages under every result to discuss that items/result. You can also leave comments about other comments.

Delete: You can remove any result you feel doesn’t fit the query.

All of these changes are saved and shown in the ‘Result History’ area on the site (which has it’s own RSS feed - nice). If you are not logged in, your IP address is the unique identifier to show who has changed what — just as with Wikipedia.

One of the main problems people had with the initial launch of Search Wikia is that the search results simply weren’t up to snuff. While they company is quick to note that that’s probably still the case in this testing phase, just how much results improve after users edit them will be a test of the entire concept.

Editing links is one thing, but users can also submit their own. Adding related searches is also as easy as clinking the link to do so and typing in a relevant word.

Mahalo is a people-powered search site that has been rising in popularity. Its results return static pages with multiple links on a topic. While anyone can submit a link to include on these pages, and Mahalo has been encouraging this and more with its newer social tools, the pages are still for the most part built by one person — a Mahalo employee. Mahalo also monitors each link submitted to make sure it is not spam. [Full disclosure: I have done some work for Mahalo]

Search Wikia is attempting to take a more community-centric approach — not surprising given Wikipedia’s nature. You have a page of search results just as you would see on Google, but anyone in the world can edit and manipulate those results on-the-fly.

The obvious concern here is spam, gaming and the simple inaccuracies of such a system. The same issues arise from time to time on Wikipedia, but a group of users committed to the cause always seem to sort these things out. The fact that anyone can just as easily delete an item as create one, and that all of this activity is recorded in logs, make this possible.

Search Wikia is still in its alpha testing phase, and as such things are still a bit rough around the edges. However, with this update we are finally getting a glimpse of Wales’ vision for the future of search. It is very promising. Test it out for yourselves.

Here’s the latest:

1) Another Googler goes to Facebook, to head its developer platform
2) Facebook traffic apparently took a dip last month — [Update: Or didn't. See Om's update, and a big looping conversation about Facebook on Techmeme]
3) Madonna latest in string of musicians to ditch record labels
4) Mozilla preparing mobile web browser, may improve mobile web user experience?
5) Mixx.com launches to let publishers give users relevant content
6) CBS acquires gossip site Dotspotter for $10 million
7) What happens when a wiki gets old?
8) Will Crescendo Ventures be saved?
9) “Virtual TV” network raises $8M
10) Industrious Kid to part ways with Steamboat Ventures
11) SendMe, a San Francisco mobile entertainment services company, acquires Mbuzzy

Another Googler goes to Facebook, to head its developer platform – Benjamin Ling, a high-ranking Google employee who has most recently led its e-commerce effort, including online payment service Checkout, is leaving for Facebook, reports Netly News. Facebook has been successfully recruiting out of Google for months, notably stealing former YouTube chief financial officer Gideon Yu (our most recent coverage) earlier this summer.

Facebook traffic apparently took a dip last month — [Update: Are we the only ones tired of talking about Facebook?] Comscore will soon release a report showing that the number of unique visitors to Facebook decreased 9.3 percent to 30.6 million in September from 33.75 million in August, according to GigaOm’s early look at the data (see table); Pageviews were also down 3.8 percent.

Some wonder if it is Comscore that is having problems collecting accurate data although Facebook itself has been citing Comscore for much of its publicly available traffic statistics.

Madonna latest in string of musicians to ditch record labels – The ever-popular and controversial artist is about to leave Warner Brothers Records for a deal worth around $120 million with concert promoter Live Nation, reports the Wall Street Journal. The money is in live performances and merchandise, not the music itself, as TechDirt has been pointing out for years. Other major artists, such as Radiohead, have also announced distribution deals that cut out the labels.

Mozilla preparing mobile web browser, may improve mobile web user experience? – Mozilla, the nonprofit foundation that leads development on open source web browser Firefox, has announced detailed, long-term plans to develop an open source web browser designed for use on phones and other mobile devices. The move dovetails with many other efforts to develop open source mobile software, such as Google’s rumored Linux-based mobile software, as gadget blog Crave points out.

Mixx.com launches to let publishers give users relevant content — The service is yet another recommendation engine, offering up content, including news stories, video and photos, depending on a user’s interests and locations. Mixx has signed deals with USA Today, Reuters.com, The Weather Channel, Kaboose and uclick Comics. It is owned by Recommended Reading, of McLean, Virginia. It has raised $1.5 million round of funding, in a round led by Intersouth Partners.

CBS acquires gossip site Dotspotter for $10 million — Valleywag got the scoop here.

What happens when a wiki gets old? — The grandaddy of them all may be revealing the answer. A study by a Wikipedia user of the site’s stats, which have been unexamined for a year, shows that edits and new account creation have both fallen from their peaks, by 20 and 30 percent respectively. The unanswered question is whether the drop in traffic is a result of the wiki fad wearing off, or simply because the online encyclopedia has reached a critical mass of information, leaving fewer opportunities to add more.

Will Crescendo Ventures be saved? — The Silicon Valley firm has been on the ropes for some time, and we wrote last year that it may not be able to raise another fund if it didn’t produce any results soon. (Scroll way down to see our original story about the firm; apologies for the buggy page). Yesterday, one of its companies, Compellent, finally went public, and it saw a 77 percent increase in its trading price in the first hours of trading — the second best performance this year. The company is unprofitable, a network storage company among a lot of competitors that have also filed to go public, or already having gone public — all losing money. The company is based in Eden Prairie, Minn., and its technology serves small and mid-sized customers. We’ll see if it’s enough to allow Crescendo to raise another fund from its skeptical investors. Crescendo owns 21 percent of Compellent, now worth in the hundreds of millions of dollars. But regulations force the firm to wait six months before it can cash in on the investment. Partner David Spreng did not respond to a request for comment.

“Virtual TV” network raises $8M — The secretive Israeli company RayV has raised $8 million in a second round of financing from Accel Partners, according to Globes. One founder, Oleg Levy, was previously an executive at Kagoor, which was acquired by Juniper Networks. It says it wants to offer a new way for “consumers to find, review, and talk about local businesses. A cross between a web-based social community and an online business directory, RAYV is where people go to express their opinions on any type of local business and get recommendations from a trusted source – their peers.” Accel Partners declined comment.

Industrious Kid to part ways with Steamboat Ventures — Industrious Kid, the Oakland, Calif. company that raised $6.5 million last year to build its site, imbee.com, as a social network for kids, is going to try to buy out one of its investors, Disney-affiliated Steamboat Ventures. Apparently, the two sides have differences in strategic direction, and so Steamboat wants to get its $2.5 million back. The companies didn’t comment on the specific reasons.

SendMe, a San Francisco mobile entertainment services company, acquires Mbuzzy — The terms were undisclosed. Mbuzzy is a four-year-old mobile start-up based in San Mateo, Calif., that lets friends share content with each other over the phone, and claims 500,000 users. SendMe previously acquired Vector Mobile, publisher of solow.com.

Here’s the latest action:

Veoh Networks files preemptive suit against Universal Music Group — Veoh, the San Diego video start-up we’ve written about, said it filed the suit to assert its rights as a copyright-compliant company after UMG threatened it with litigation.

Geni gets cloned by a German Verwandt, but there’s also Israeli MyHeritage — Verwandt, the German copycat of the family tree social network company Geni, told us last month it had raised financing from Neuhaus Partners, and had broken into the top 500 sites in Germany according to Alexa, with more than 200,000 profiles in three weeks (was it spamming people?). Verwandt’s only real difference from Geni, however, is that it offers comic avatars, so we didn’t bother looking too closely. However, now there’s also Israel’s MyHeritage, which has just raised funding from Accel Europe. The company reportedly has at least $3 million and maybe more (checking). These sites are coming out of the woodwork and remarkably, all getting funding.

MySpace barely making any profit — News Corp.’s Fox Interactive unit, which consists mainly of MySpace, turned a profit of $10 million on revenue of $550 million during the last fiscal year. With MySpace doing 4.3 billion page views a day, it means the company is making a mere fraction of a cent on each page view — just the latest sign that social networks are in the early days of trying to monetize with ads.

Nirvanix to launch content delivery network — The San Diego, Calif. company aims to compete with Amazon’s popular S3 storage web service. In a statement, it said it plans to offer delivery of rich media and streaming content for web developers, and is designed to be “the backbone for social networking and web 2.0 companies.” It also plans to announce in September that it has raised venture capital, though the news has already leaked (funding is reportedly $12 million).

Google showing bias for sites that use Google Checkout — Google is using its clout to boost the ranking of sites that use its Google Checkout service, penalizing those that rely on eBay’s PayPal, according to this account. [Update: Google has responded: "It's common practice to include descriptive links in blog copy, and we added the link in question for that reason," a Google spokespersons said. "This was an editorial decision, and it was made independently by Google."]

Segway Enthusiasts Club of America disbands — The hyped gyroscope-laden scooter, the Segway, apparently is losing its fan base.

Blog network GigaOm has brought on a business person and a professional managing editor — Details here.

Internet music radios — Companies like Roku, Com One, Revo, Terratec and Tivoli have all produced tabletop or bookshelf radios that are “freaky hybrids” of the old radio and the new Internet. The New York Times’ Pogue has a review. You tune into radio shows just as you have for decades, but the radios’ antennas are internal Wi-Fi receivers that connect to a wireless home networks.

Xconomy, business technology new site focused on Boston area, raises undisclosed amount of funding — Founder Bob Buderi tells us the round was led by CommonAngels. Here’s his post about it. Robert Buderi is former editor-in-chief of MIT’s Technology Review. Steve Woit, publisher, is a partner at IDG Ventures in Boston.

The Universal Music Group acquires a stake in the operator of the urban social networking Web site, Loud.com — Details here.

Color-coding on Wikipedia edits — Wikipedia is about to test a quality-control technique: Coloring a new edit red, in order to flag potentially dubious content, especially if the editor is new or otherwise untrusted. As the editor gains a reputation, the marking color will change and become less red. There’s a test site here, and a visual example here. More details about the experiment here. It will first be tested on a related, smaller site, Wikia.

Ooma offers pre-sale orders of its Hub and Scout telecom products — Ooma says demand for its products, which allow free land-line phone calls, was sufficient to open orders for sales earlier than planned. We reviewed the home telecom product here.

Latest round-up in the world of tech:

Defense Department’s Grand Challenge moves downtown — The great annual race of robotic cars, until this year held in the desert, is moving downtown. The DARPA-sponsored event awards the winner $2 million. Unmanned vehicles will attempt to avoid people and buildings instead of boulders and sagebrush, with no remote control or other human interference. (See Merc story here.) The goal is to help the Defense Department fulfill a Congressional mandate: that one-third of combat vehicles be unmanned by 2015. Guess this is a sign of the times: While the U.S. military rolled through the Iraqi desert with no problem, managing street warfare is more of a challenge. Meanwhile, a Jon Feiber, a venture capitalist sponsoring one of the competition’s entrants, suggests the project could help with traffic congestion. Another possible payback my be fuel efficiencey, if cars are pacing themselves at optimal distances from each other, and at optimal speeds.

Speaking of traffic, look at Wikipedia’s — Google traffic going to Wikipedia is exploding, with Wikipedia now the No. 3 website in Google’s downstream, after Google Image Search and MySpace, according to HitWise. That’s phenomenal, for a non-profit company that has less than ten full-time employees (Ars Technica has good summary. It’s costly, too. Wikipedia’s bandwidth this year is expected to cost up to $100,000 a month, and it’s running more than 350 servers. With annual costs at about $5 million a year, but incoming donations at barely $1 million, something might crack soon — the company says it only has three to four months of cash left. Put two and two together: If Wikipedia’s getting that much traffic, all is has to do is put up a few Google ads. If anything, Google will look more favorably at sending even more searchers over to Wikipedia — and monetizing the site would be easy. We don’t know founder Jimmy Wales’ personal motives, but publicly at least, he’s proclaiming he doesn’t want to let ads onto the site.

Fancy that, hedge funds are actually useful — The NYT cites a study showing that hedge funds boost the value of companies they invest in, at least in the very short run, on average, and holding on to the gains for at least a year.

For the green tech fans — William Hudson writes an engaging piece about the challenges faced by ethanol and other forms of alternative energy. He concludes with what we all should know, i.e., that the sun is where the magic is. Future breakthroughs will be around how we harness its immense power. That’s why investor Vinod Khosla is pitching the benefits of solar lately, and this goes beyond the solar panels we traditionally associate with solar.

Visto gets $35 million more, to sue? — When we asked the mobile messaging company Visto last Wednesday whether the Redwood City, Calif. company could comment on reports it had gotten $35 million more in venture capital, a spokeswoman said she couldn’t comment on “speculation.” Two days later, on Friday, the company issued a press release confirming the investment. So why was Visto so secretive, seeking to avoid acknowledging the December funding? Well, as Valleywag points out, the lead investor, Altitude Capital Partners, turns out to be a specialist in investing in companies with patents and “historical litigation.” We’ve already mentioned how Visto appears to be going down litigation path. It hasn’t made money in ten years, so perhaps this is the only way?

New York is back — Here’s a good story about New York’s reemergence as a technology hub, given its weight in the publishing and advertising worlds.
This, though, after the NYT recently wrote about Silicon Valley as the new hegemon.

Sparter, offers virtual currency trading — While auction giant eBay decided to ban sales of virtual property, there’s a new company, called Sparter, that is stepping in to let gamers trade virtual currency. The company has received venture capital funding from Bessemer Venture Partner, and while it wants to work with IGE, a service that lets gamers trade in their virtual currencies for one game in exchange for another, Sparter apparently wants to also let you bypass IGE, letting you trade directly with other gamers. (Via Virtual Economies.)

TextDigger is the latest company seeking that Holy Grail: Improving on Google’s results by understanding the sense of the words you’re looking for.

TextDigger’s search engine is called Digger, and it just launched at the DEMO conference.

First, some context: Digger, of San Jose, joins Powerset, the San Francisco start-up, and Hakia, of New York, and others which are trying to do something similar. Our piece on Powerset sparked debate within the search industry, namely because some experts believe automated search engines can never understand words the same way we humans do. Google, many think, is doing about as good a job as is possible. Google doesn’t try to assign meaning to your search term. It merely ranks the pages it thinks are the most popular that contain those words. Powerset still hasn’t launched. Hakia has, sort of, which we’ll get to in a minute.

TextDigger addresses the semantics problem by asking users to help it. If you search for “hotel with a view of the golden gate bridge,” it will tell you what it assumes about your intended meaning, and then asks you to modify. “View,” it tells you, means panoramic view, as opposed to personal belief. That might be fine, but what if you want personal belief?

By clicking on “refine keywords,” you can tell it you want “view” to mean personal belief (see screenshot below), or both panoramic view and personal belief. In other words, it is a classic Web 2.0 company, getting the masses to work on its behalf, and in turn improve results for everyone. This is significant, because Digger launches ahead of Wikipedia founder Jimmy Wales’ effort to do something similar. Digger relies on what people tell it about semantics. Powerset, by contrast, relies on smart grammar interpretation, which is very different.

Whether Textdigger can pull this off is another question.

It is in a closed testing period. You need an invite. Chief executive Tim Musgrove says it gets better the more people use it. It’s not ready for the masses.

We played with Digger. Our conclusion: We think this is useful tool, and we’d be surprised if Google didn’t implement something like this soon — especially if Digger gets any traction. It should be easy to do.

We should note, with Digger, you can choose to refine the word meaning for only yourself, or for the community at large. And there are shortcomings. Digger dissects meanings of individual words only, so it can’t assess the meaning of two or three words together, like Powerset is trying to do. The other shortcoming is that depends on you logging on at the site, to personalize results for you. It will have a hard time opening up to non-registered access.

TextDigger has received $1.5 million, led by CNET, where Musgrove was a researcher.

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Meanwhile, Hakia has quietly launched.

Check out what it is doing with searches for people, like for Madonna. It categorizes results into news, music profile, biography and more, rejecting the repetitive results that you get at Google. Similarly, look results for chocolate, India, The Beatles or Red Sox. It’s too early to tell what exactly Hakia is doing, as we’ve yet to talk with them. But it’s essentially a hybrid of Google and Wikipedia — a more aggressive push toward the categorization strategy that Ask has been heading toward (see the right hand side of this search for chocolate, for example).

Auren Hoffman is one of the Silicon Valley’s most connected people. For a while, he made his living with his Rolodex, hooking people up through his firm Stonebrick.

Last year, he started a company called RapLeaf, designed to keep track of your reputation for reliability as you buy and sell things online. It works across Web sites, and so takes eBay’s reputation system and extends it universally (our story here).

So it is ironic that Hoffman has been attempting to tidy up his own online reputation, by signing onto Wikipedia under the name “MLK Hamilton” to make changes to his profile there.

Someone first noticed that “MLK Hamilton,” the alias of the person making changes to Hoffman’s Wikipedia entry, seemed a strong coincidence, given that Hoffman lists Martin Luther King and Alexander Hamilton as two of his personal heroes. When, in turn, that person noted the coincidence at Wikipedia, another anonymous person, with the same IP address of MLK Hamilton, came along and removed the reference. Was Hoffman secretly trying to clean up his online profile and then, additionally, trying to protect himself when he was found out? Valleywag, Silicon Valley’s gossip site, began asking questions, though didn’t get confirmation from Hoffman himself.

We called up Hoffman, and he told VentureBeat that he had gone in to change his profile because a friend, Jonathan Abram (of Friendster fame) had added “silly” things to his profile like how his San Francisco loft is decorated with pictures of prominent Rebublican politicians, and that he was a good dancer. Hoffman said he is not a good dancer, and that pictures on his wall aren’t relevant. Since Abrams had added the entries as a prank, Hoffman said, he felt justified using pranksterish means to make the changes. “I didn’t change anything relevant,” he told VentureBeat. “I didn’t put anything up there that makes me sound good.” When we asked whether his actions might contradict the spirit his own efforts to create a reliable online reputation company, he said he didn’t think so.

Another reported deletion request was about his connection to a public relations firm that took Pentagon money to bribe Iraqi journalists.

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.

SpotDJ, an angel-backed start-up in San Francisco, yesterday launched a service that lets people insert “spots” within iTunes music, which can be listened to by other SpotDJ users. The short spots can be descriptions of the song’s artist, a back-story to the song, or a recommendation about a different version.

Here’s how it works: Once you’ve downloaded SpotDJ, you can listen to a song on iTunes, and then hit the “spot this song” button. That lets you record a spot, and then other SpotDJ users can listen to it. If you don’t want to get bugged by random spots, you can set preferences to select only your favorite DJs. You can rate spots between 1 and 5, so that the community benefits places only the highest rated spots for a given song.

Strip out the junk from your Google search results — Oliver Humpage found that searching for products on Google can be annoying: Nothing but spam from Kelkoo, Pricerunner and other places clogged up his search results. So he wrote GiveMeBackMyGoogle.

Baidu starts (censored) Chinese version of Wikipedia — Chinese search engine Baidu has proven that it works well with Chinese authorities on censorship issues. Some of Wikipedia’s entries are blocked in China. We’ll see if Baidu can do any better.

Turns out, the plush looking MeeVee sign was for free — We mentioned new lavish looking sign of MeeVee, the personal TV and entertainment guide start-up, because some suggested it was a sign of a bubble era. We heard back from the MeeVee folks, who told us it was part of their lease extension negotiation. Also, the sign is visible from the 101, particularly at night, so it was a no-brainer, they said. No bubble perhaps, but it is true that the Silicon Valley corporate real estate market has tightened considerably lately (registration required).

The PayPal mafia and diagram, yet again — You may have seen the PayPal “Diaspora” stories before, about how the former employers of that online payment company have moved on to form other companies. The New York Times jumps in with another story about where all the PayPal folks ended up. It has a helpful diagram (if you’re registered with the Times, click on image here to go to the original version, which you can enlarge), and more background about where they came from, and how they still help each other out:

Mr. Thiel tapped his network of friends from Stanford, many of whom had worked at the Stanford Review, a libertarian magazine that Mr. Thiel co-founded in 1987. They populated PayPal’s business ranks. Mr. Levchin, for his part, hired engineers in large part from his alma mater, the University of Illinois at Urbana-Champaign…

Reuters reporter lives in Second Life — The news service has assigned a reporter to live within Linden Labs’ virtual world game, Second Life, and report what is going on there.

MySpace spruces up its site to highlight its own video — Now that YouTube is more of a threat, MySpace has made a few minor changes to highlight its own video offerings. MySpace now features videos on its homepage (see top left hand corner). User profile pages now include a section called Video Space, which displays videos the user has uploaded.

A much better way to connect: two feet of cable — Apple chief executive Steve Jobs has a good line, saying Microsoft’s Zune music player is unlikely a threat to Apple’s iPod. He tells Newsweek:

I’ve seen the demonstrations on the Internet about how you can find another person using a Zune and give them a song they can play three times. It takes forever. By the time you’ve gone through all that, the girl’s got up and left! You’re much better off to take one of your earbuds out and put it in her ear. Then you’re connected with about two feet of headphone cable.

Starting an Internet business — I’ll moderating a panel about “Monetizing your Site” at the From Garage to IPO conference tomorrow at TiE in Santa Clara. Event details here.