News of Google most recent project, Knol, came out late last Thursday without, as far as I can tell, much in the way of press pre-briefings. All the major publications were late to the story. Blogs hit it fast, but had nothing to go on other than the brief blog post put up by Google’s Udi Manber announcing the project. Our initial story on Knol is here.

From a product perspective, Knol is not much different than existing products like Squidoo and Hubpages. It’s a new knowledge base for authors. Anyone, eventually, will be able to write on any topic they choose. Google will provide authoring tools, store the information, allow others to comment and suggest edits, add ads with the author’s approval, and provide traffic via their search engine.

But Knol isn’t really aimed at Squidoo and Hubpages. It’s much more likely that Google is jealously eyeing the massive traffic that flows through its search engine to Wikipedia. As Nick Carr has noted, Wikipedia continues to climb and climb in search results for many top search terms.

More Ad Inventory Needed, ASAP

Wikipedia, a non-profit, has stubbornly resisted any efforts to monetize its pages. Google would kill to supply ads to Wikipedia. Barring that, competing with them makes a lot of sense.

Google needs to grow revenue to support their valuation. And for that, they need ad inventory. It wasn’t surprising when Google started hosting news directly and allowing comments (that = page views). So the idea of them hosting a knowledge base shouldn’t be surprising, either.

Authors have a choice - they can have ads or not. But if they have ads, they can only choose Google. Many authors are going to include ads, and Google will get extra inventory.

Delicious Timing

Wikipedia has caused more problems than just refusing to take Google’s ads. They are also launching a much anticipated search engine this month via their for-profit arm, Wikia (Wikipedia founder Jimmy Wales hates it when Wikia is called that, but it’s damned hard to tell where Wikipedia ends and Wikia begins sometimes). Google isn’t likely to be particularly scared of Wikia’s new search engine, but it has probably been a little annoying for them to watch all the press about the upcoming “Google Killer.”

Google doesn’t usually pre-announce products before launch. in this case they did. Why? Perhaps as a reminder to Wikipedia that competition can flow both ways.

Anyone Remember Google Base?

As a content management system, Knol is a kissing cousin to Google Base, a classified ad platform that Google launched in late 2005. Google Base has gone exactly nowhere - if anything it’s a spam farm and nothing more. But at the time of its launch the New York Times and others heralded it as a major disruptive force to the classified ads world. Knol may be Google Base with a little more strategic thought applied.

No Conflicts Here, Move Along

Google says that Knol pages will be indexed into their search engine but will have no special ranking. That’s a little bit untrue, since they’ll be hosted by Google and will have the advantage of Google’s hefty PageRank to lift them in search results. And since no one will be auditing Google to ensure that Knol pages are treated just like everyone else, there are bound to be claims of conflict of interest. The fact is, Google will make money from Knol, and so they’ll have a financial interest in moving people to those pages. That makes them less believable in the role of a neutral gatekeeper.

Google is now synonymous with search. Offering Google Knol and putting it in the search results is analogous to Microsoft offering Office for the Windows platform. Sure, anyone can compete with Office, but Microsoft has a natural advantage and finds ways of keeping market share. The Knol team will likely do the same over time.

Wikipedia v. Knol

Wikipedia gets massive support from the community because it’s non-profit. Google can’t compete with that, so they’re focusing on putting the authors’ names in lights and giving them a little cash on the side, too. That should help them pull some heavy Wikipedia contributors over to their project.

Very soon we are going to see a lot of Wikipedia content moving wholesale to Knol. Wikipedia content is basically free to use, redistribute, copy, whatever, under the GNU license:

All text in Wikipedia is covered by GNU Free Documentation License (GFDL), a copyleft license permitting the redistribution, creation of derivative works, and commercial use of content while authors retain copyright of their work.

Anyone writing for Knol is likely to at least peruse Wikipedia content before publishing. And if they see anything good, they are at liberty to simply lift and copy it over to Knol, and get a adsense check for their time.

So, in a way, Google has found a way to monetize Wikipedia content after all.

In a poll on Friday, TechCrunch readers narrowly said Google hasn’t overstepped its boundaries with Knol. If Knol is a success, those results may be a little different a year from now. In fact, the more successful Knol is, the more uncomfortable people are going to be with Google as gatekeeper and content provider.

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Simply slapping AdSense on your site is one of the easiest, but not necessarily best, ways to monetize your website. There are a lot of factors that go into getting the most out of your ad units. They range from placement, color, ad network, or even time of day. Each of these factors can affect ad performance

YieldBuild, a new service from the company that launched HubPages, will take a stab at optimizing those ad units for you. It’s similar to the Rubicon Project, a highly rated ad optimization platform in beta that finds the best mix of ad network and demographic data. However, YeildBuild has a focus on layout and design.

It uses computer algorithms to automatically optimize your site’s ad spots with the most profitable combination of ad layout, style, and network. The system continually tests alternative configurations of layouts, networks, and color, looking for the highest performing ones. You can see a timeline of the system substituting ads below. It takes about 100,000 impressions to train the system. As users become unresponsive to the ads, the system is supposed to switch in a more profitable combination of layout and networks.

They’ve been privately beta testing the system with some fairly well known startups and saw improvements of 50% to over 100% in effective CPM rates on user profile pages. They’re currently looking for more beta testers to try the system out on.

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Berkeley based Hubpages, which we wrote about in February, launched today. CEO Paul Edmondson also tells me that he’s raised a cool $2 million from Hummer Winblad, with Mitchell Kertzman taking a board seat and Will Price taking a board observer seat.

Hubpages allows user to create topical web page (think Wikia or Squidoo) that also included blog-like modules like comments. Pages are tagged by the creator and by readers, allowing for quick browsing among related pages.

Users are encouraged to build sites that can generate revenue. A good example is a list of important books on a topic, or a review of a product (the best running shoe, for example). Hubpages will insert google ads relevant to the topic, as well as allow links to Amazon, eBay and other affiliate-paying retailers, and split revenue 50/50 with the page creator. Compared to Squidoo, which only pays 50% of profits to page creators, that’s a good deal.

I created a page on the site, called Crunch Network, to experience the site building tools. The page took about 10 minutes to create, and includes summary text, RSS feeds from three of our sites, and a comment area. The creation tools are far beyond what wikia or squidoo has currently (I’d appreciate any comments on this from Squidoo authors), using ajax for previews, moving modules around on the page, etc. They’ve done a really nice job.

Pages are ranked and presesented on the home page. Rank is determined by a algorithm that takes total traffic and “polarization” into account; polarization is simply how often people click that they like, or don’t like, a particular website. Whether they like it or not isn’t relevant, only that they have an opinion.

Can Hubpages succeed? If it will, it has to differentiate itself from Squidoo, which has yet to see significant usage growth. A key way to increase the likelihood of links to hub pages is to encourage the creation of regular fresh content via a blog-like module. Paul says this is in development, and also adds that it’s so easy to create new hubs that beta users have been creating new ones regularly. Readers can subscribe via RSS to an individual author’s hubs.

The Hubpages team is founded by three guys out of Microsoft that were part of the successful startup MongoMusic. The team includes Paul Edmondson, Jay Reitz, and Paul Deeds. Most recently, Paul Edmondson was the Group Product Manager for MSN Entertainment, Jay Reitz was the Development Manager, and Paul Deeds was a developer in Windows Media Internet Services.

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Paul Edmondson, the founder of HubPages in Berkeley, California, thinks Squidoo is onto a good idea, but needs improvement in a number of areas. And he’s in the process of building something he says will be significantly better, both for publishers and readers.

Squidoo has basic tools for publishers to create “lenses”, which are topic specific websites. For example, see this site on Web 2.0 by Joshua Porter. The idea is to allow an expert to create a site, combining static/evergreen and refreshed content. Better sites bubble to the top and publishers have the ability to earn a share of advertising.

But Squidoo is stingy when it comes to sharing money with publishers. They split profits, not revenue. And they give 5% to charity before splitting profits.

We divide up the money we receive in a very public way. First, we pay our bills. That’s direct out of pocket expenses like rent and servers and salary and benefits expenses (our CEO doesn’t take a salary, and neither does our board of directors). Then, with no other deductions, we pay 5% of our post-expense revenue directly to the charity pool, 50% directly to our lensmasters and retain the rest to pay off investors and employees.

HubPages is taking a different approach. They are promising more tools to create and promote sites, as well as an aggressive 50/50 revenue split with publishers.

Hubpages purpose is to provide easy-to-use tools and traffic to help anyone to produce content and monetize their knowledge by creating webpages. There will be monetization programs to choose from consisting of products, advertisements and lead generation tools that each person can easily incorporate into their pages. Hubpages will split revenue with the content creator. The pages are organized in the Hubpages website based on algorithmic quality index that promotes the best pages throughout the hierarchy (based on tags) of the website. Each author will earn a reputation score called a HubScore that can be referenced to meter the quality of the content by an author.

Hubpages will be positioned to take advantage of the significant numbers of new web content providers that want to supplement their income through content like many people do on eBay by selling goods.

The Hubpages team is founded by three guys out of Microsoft that were part of the successful startup MongoMusic. The team includes Paul Edmondson, Jay Reitz, and Paul Deeds. Most recently, Paul Edmondson was the Group Product Manager for MSN Entertainment, Jay Reitz was the Development Manager, and Paul Deeds was a developer in Windows Media Internet Services.

Sign up for the HubPages beta at Hubpages.com.

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