Remember Squidoo? Founded by current CEO and famous marketing guru Seth Godin, the service allows Internet users to generate rich, topical web pages (dubbed ‘lenses’) to serve as a hub for information, videos, links etc. centered around any given subject. The concept is similar to what companies like HubPages, Mahalo and Helium are all about.

Now Squidoo is looking to monetize the web service directly – rather then depend on on-site advertising – by persuading brands to pay for management of their respective lenses.

In a blog post, Godin shares more details about the new initiative – dubbed ‘Brands in Public’ – and explains why he believes brands will be willing to pay for it.

You can’t control what people are saying about you. What you can do is organize that speech. You can organize it by highlighting the good stuff and rationally responding to the not-so-good stuff. You can organize it by embracing the people who love your brand and challenging them to speak up and share the good word. And you can respond to it in a thoughtful way, leaving a trail that stands up over time.

That all sounds super duper, and I have the highest respect for the man, but I also have mixed feelings about the way Squidoo is going about it.

Rather than convincing companies to set up their own public profile pages for their brands to aggregate and manage online conversations, Squidoo is creating hundreds of unofficial ones (e.g. for Guinness) in the hopes that companies will come to them and cough up $400 per month for the right to develop the page on their terms. Once a company pays up and gains control over the relevant Squidoo lens, the left hand column will ‘belong’ to them.

This will enable companies to post responses, highlight third-party blog posts, run contests and quizzes, and more. Basically, it becomes a place where companies can both lead, monitor and respond to the online conversations about their brands, which Godin says is particularly helpful when shit storms brew on the Web (whether deserved or not).

I’m not sure I like the fact that Squidoo takes the lead in creating pages for brands only to ‘unlock’ them for a monthly fee afterwards. Sure, there’s some truth to its claim that conversations are happening around the web anyway and they’re merely aggregating them, but I’m sure many will claim that the company is doing this for obvious SEO reasons. Get Satisfaction follows a similar strategy of holding company profile pages ‘hostage’, and has in the past been criticized for that behavior.

I also think a $400/month price point is extremely high for something that can easily be built internally. Squidoo seems to realize this and offers the first 100 brands to sign up a share of the $500,000 in-house ads that the company will run across the site promoting the service and the first partnering brands.

Either way, Squidoo already signed up a number of beta-testers (e.g. Home Depot) and hopes to attract more brands in the near future. The company published an e-book (PDF) about why any company should be considering this, and in it shared some numbers about the Squidoo network size.

Founded 3 years ago (Michael Arrington thought it could become Godin’s ‘purple albatross’ at the time), Squidoo claims it has attracted 400,000 users who hand-built over 1 million pages to date. Squidoo also says it has raised a ’significant’ yet undisclosed amount of capital for charity and is one of the 500 most-trafficked sites on the Web. Looking at the Compete chart below, they do seem to be getting a decent amount of visitors (about 4.4 million a month) even if its two closest competitors both attract a bigger audience at this point.

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The bomb-shelter mentality among startups is now so severe that even companies raising money are announcing layoffs in response to diminished economic prospects. Boston-based Helium just closed a $17 million series A financing about ten days ago, and then cut 30 percent of the organization (18 people) last week. CEO Mark Ranalli tells me:

We expect a deterioration of overall ad rates, and a slowing of the economy in general. Our approach was to take a third of every group across engineering, customer service, and sales.

Ranalli has been raising the $17 million piecemeal over the past year from hedge funds, family trusts, and wealthy individuals. The last $2 million came in two weeks ago. Combined with the current cuts, Ranalli believes he has enough to make it to profitability.

Helium is a reference site filled with general-information and how-to articles. It competes with About.com, but instead of hiring professional writers, Helium’s articles are written by members of its community. The best articles are voted to the top by the community, but in a way that makes it difficult to game the system. Instead of being able to vote up your own articles or those written by your friends, readers are given a random sample of articles and asked to compare them in pairs. This A-B approach filters the best articles to the homepage. (Helium spinoff OurStage applies this same system to finding the best raw musical talent.)

Since it launched two years ago, Helium has attracted 130,000 writers who have contributed 1.2 million articles. Most of those people only write once or twice and then go away, but Helium has managed to cultivate a core of about 10,000 active writers. And it has pared down that 1.2 million articles to 800,000. About a quarter of the submissions are just not even worth keeping. The writers get a split of ad revenues on their pages, which isn’t a lot given that the site gets on average $2 for every thousand pageviews. Ranalli plans on rewarding top-rated writers a little bit more by paying star-rated writers a token amount up front (50 cents to $2.50 per article), in addition to the revenue split.

According to comScore, Helium attracts only 859,000 unique visitors per month in the U.S. (Ranalli says the internal number is closer to three million a month). Traffic flattened for a few months when Ranalli decided to let the site grow organically instead of pumping up the numbers with marketing dollars. Now, he says, October looks like it is going to be Helium’ strongest month ever.

But advertising is not the only way Helium makes money. It also hosts a marketplace for freelance writers where publishers, newsletters, and even offline newspapers and magazines can bid for talent. Helium members can go there and offer their writing services and typically get anywhere from $30 to $300 per article, with Helium collecting a 20 percent fee. Says Ranalli:

It is only about six months old, and it just eclipsed our ad revenue.

These days, every penny counts.

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Helium serves as both a directory and marketplace for user generated articles. Writers can earn revenue based on the quality and popularity of each article they submit, though typical payouts tend to be quite small. The reward-a-thon augmented each writer’s pay by $1-3 per article, depending on the quality of the author. In the end, the site says that over 1,000 Helium members earned rewards during the period (only a couple dozen made over $600).

The reward-a-thon was not without some controversy, however. The site employs a complex rating system for each writer, and those that weren’t ranked highly enough were knocked into a lower paybracket or out of the reward-a-thon altogether. An author’s “quality” is determined both by how well their articles are judged, and by how good they are at rating articles written by other contributors. Much of this system relies on the opinions of others, making it difficult for a contributor to maintain a high ranking.

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We’ve covered the service twice before, once in 2006, then last year when Helium Marketplace first opened its doors. Helium offers two services: a user generated content portal that’s part Wikipedia, part Squidoo, complete with revenue sharing. The marketplace works in a similar way to oDesk, Scriptance and similar services, marrying buyers looking for articles to be written, with writers who can supply original content. Unlike similar marketplace services, individual writers are not selected for each job, instead submitting articles against job requests that can then be voted upon by other users. The publisher then selects the articles they want to use from the rank-ordered list.

During its beta phase, Helium Marketplace signed up over 100,000 active freelance writers. Payments per article range from $20 to over $100, with a 20% transaction fee going to Helium.

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Over the past couple of months they’ve been running a pilot program for new “Marketplace” service that connects authors and publishers. Today, they’re officially launching the service. Using “Marketplace”, publishers can list bounties for articles they want written. Authors then submit their stories following the publisher’s writing guidelines and compete for the bounty. Publishers can select any of the articles as the winner, although Helium’s peer review ratings help rank the list. Payments per article range from $20 to over $100, with 20% transaction fee going to Helium.

For the pilot they have 14 publishers listing about 10 bounties a piece. In September they expect to have over 1000 publishers on the system.

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I should disclose that Helium is a sponsor for the upcoming TechCrunch New York Party, though to be honest I wasn’t going to write about them after the site was heavily criticized on Digg yesterday for the quality of the writing. After using it myself though I’ve decided that it’s got more potential than I thought it might. The group rating system in particular could take care of the fact that the site is currently dominated by short, unhelpful text obviously written by people for whom English is a second language. Quality content is already starting to rise to the top.

It’s not expert vetted, for that you’ll have to go to the mainstream media or Citizendium, and it’s not collaboratively written like Wikipedia. It’s not crazy (in a nice way) like Squidoo. It is collaboratively edited in a unique and compelling way.

Here’s how it works. Users are asked to write articles on topics from 25 categories and many subcategories, starting with nothing but a subject line. After writing one article, users are taken to a page to rank other articles in the topic area they just wrote about. Two articles written by other users but with user names removed are placed side by side and the reader is asked which is a better article. Any number of articles can be compared two at a time on a continuum (”article A is much better, or a little better than article B” for example). The best articles are then displayed on the category’s front page, followed by related articles in order of reader ranking.

Users can check the status of their articles – mine on “The best providers for internet phone calls” is currently at #11 out of 21 on the topic. It’s not clear what the revenue split on ads surrounding an author’s content is, but you can monitor your earnings and request payment by PayPal when you hit $25. You can also subscribe to the top articles on any topic by RSS.

Each author has a space to provide information about themselves, followed by a list of all the articles they have written and their rankings on that topic. It’s a well constructed site, if heavy on the ads.

Helium takes up a number of different trends we’re seeing around the web, the aggregate one click ranking reminds me of the Google Image Labeler (a game to build search metadata for images) and paying top users for content creation is clearly something many people are interested in. Question and Answer sites are proliferating rapidly, but the structured topics of Helium have a different appeal.

I think this has some real potential. It’s fun to click through sets of articles and click to rank them. If the ad revenue split is satisfying I can imagine some people jumping ship from places like shill central (PayPerPost) and taking up writing at a site with feedback, community and honesty about writers getting paid.

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