Friday’s essentials from Silicon Valley

Lot of developments to report, so here’s a smorgasbord:

—Socialtext wins SAP’s backing: SocialText, the Palo Alto wiki and social software company, has finally scored more backing, this time from software giant SAP — more on this later. Our first story on their funding a few months ago is here. Apparently, now chief executive Ross Mayfield is taking the company back to an open source model.

—BitTorrent raises money: The hot file-sharing protocol company, BitTorrent, of San Francisco, this month raised $8.75 million in a first round of funding round led by DCM-Doll Capital Management, according to PE Week, and proving again that Om “scoop” Malik had it right all along. With so much VC interest, the valuation must have been pretty high.

—Google’s Secure WiFi may not be that secure, reports TechDirt.

—Buying Red Envelope: We’ve talked a lot about Sequoia this week. After Sequoia partner Michael Moritz stepped down from Red Envelope after a clash with founder Scott Galloway, Galloway has been furiously buying up stock of the high-end online gift company. (Tip from Michael Brush)

—Altera gets slapped for freezing out analyst: The company shut him out after unfavorable analysis. Now it is suffering the result, says NYT (sub required). The system’s checks and balances seem to be working.

—RFID bubble: Let’s see, just how many Silicon Valley RFID start-ups can venture capitalists fund? The wave started last year, but they’re still coming in. Yesterday, two more: Mountain View’s Blue Vector Systems got $4 million in a second round, from Draper Richards and Onset, among others. RFID stands for radio frequency identification, and refers to tiny sensors that can be put on products to keep track of them. And AeroScout, of San Mateo, said it has received an investment from Cisco Systems, for a total funding so far of $23 million.

—The IPO of Ikanos: The fundamentals are worth noting on this one. The Fremont producer of semiconductor chips, which speed the delivery of Internet content into homes by as much as 100 times, went public yesterday. Its stock rose slightly. But we’re looking at the numbers and scratching our heads. So it has shipped 6 million chips, and there’s a market of 40 to 60 million by 2009, according to analysts in the story by our colleague Dean Takahashi today. But the company is losing $4.5 million in the first half of this year. While that is less than the $7 million loss last year, you’d think a company that goes public and has won a solid percentage of its available market would be profitable, no? Its revenue has barely budged in the first six months. Moreover, it faces intense competition and lots of other challenges (see risk section). What do we know? Perhaps all Ikanos has to do now is lower costs, lock into economies of scale and everything will be fine.

—Microsoft quashes study of its search engine results: The WSJ has the story, although mentions this controversial move only lower down. Search Engine Watch’s Danny Sullivan follows with an analysis. Basically, Microsoft’s MSN dropped to No. 5 in search result quality in a comparison test with other search engines. It was No. 3 before it dropped Yahoo as the engine behind its search results.

After getting a preview of the results of the research and Keynote’s plans to highlight Microsoft’s slip in a press release, Microsoft requested that Keynote not make the results public, a person familiar with the matter said. Keynote, of San Mateo, Calif., says it made a “business decision” not to disclose findings from the study about specific engines. In a December regulatory filing, Keynote named Microsoft among its 10 largest customers by revenue.