Jimmy Wales, the founder of the popular Internet encyclopaedia Wikipedia, has revealed more details about the development of his new for-profit search engine Wikia. During the O’Reilly Open Source Convention (OSCON) held in Portland, Jimmy Wales announced the acquisition of from search engine LookSmart and the release of the software under open source.

Grub, a distributed search spidering technology, will enable Wikia to index the millions of websites on the internet.

“We’ve had a tremendous response from very interesting commercial players in the search space,” said Jimmy Wales, co-founder and chairman, Wikia, Inc. “The desire to collaborate and support a transparent and open platform for search is clearly deeply exciting to both open source and businesses. Look for other exciting announcements in the coming months as we collectively work to free the judgment of information from invisible rules inside an algorithmic black box.” [Wikia]

LookSmart will be providing text and display ads in Wikia’s free wiki communities and eventually on the Search Wikia site, Wales said. Wikia will sell ads a cost-per-click (CPC) or cost-per-thousand (CPM) models. Unsold inventory will be back-filled by ads from LookSmart’s distributed ad network.

Microsoft continues to invest in online advertising to be able to compete with major rivals Yahoo and Google. In the last few months, the firm has made three digital acquisitions; first it was European mobile advertising firm ScreenTonic, then big aQuantive for $6 billion (Microsoft’s biggest acquisition in history) and now online advertising exchange firm AdECN. According to Microsoft, AdECN would add the final element to its online advertising portfolio.AdECN is a real-time, auction-based, marketplace for buying and selling display advertising. It is similar to that offered by Right Media, the firm Yahoo acquired last April for more than $680 million.

“It works much like a stock exchange. A member of the AdECN Exchange buys on the exchange for its advertisers and sells on the exchange for its publishers. This guarantees members the best possible liquidity – fewer campaigns go unfilled, less inventory goes unsold – and more liquidity means higher revenues.The member’s advertisers and publishers benefit, too, from the extreme targeting and impression-based pricing in the AdECN Exchange, which helps members attract and retain the best clients.” [AdECN]

Founded in 2003, and with nearly 30 employees, AdECN brings new capabilities and expertise to Microsoft’s online advertising network AdCenter.

Second largest social networking site, Facebook, has bought Parakey, a startup run by two engineers who helped create Mozilla’s Firefox open source browser. This represents the company’s first acquisition in three years of history.

Parakey is a platform for building applications that merge the best of the desktop and the Web. Like desktop applications, these applications work offline, offer more privacy than pure websites, run quickly, and integrate with your computer and its devices. But like Web applications, they are also more creative, visually alluring, accessible from anywhere and potentially accessible by anyone. In short, Parakey apps are designed to be both useful and social, a combination that is too rare today. [Parakey]

Facebook’s acquisition of Parakey is a clear indicator of Facebook’s CEO (23-year old Mark Zuckerberg) intention of keep building the company instead of selling to potential acquirers. One year ago, Yahoo offered $1 billion for the firm, and was rejected right away… today some sources from the Deal indicated that Peter Thiel, a Facebook director who is president of hedge fund Clarium Capital Management LLC and managing partner of VC firm Founders Fund Management LLC, estimates it would command a price tag between $7 billion and $10 billion.

Facebook ranks among the fastest growing websites of the moment, and its growth potential is undeniable. However, it is difficult to estimate the real value of a firm which has not yet clearly developed its business model.

The firm might either end up being acquired by a tech giant or going public some months from now… time will tell. We will keep an eye on Facebook’s promising future.

A new VoIP startup called “ooma” has been launched after receiving $27 million in funding. Ooma will allow users to make and receive phone calls through their normal telephones at a very low price. The company will compete directly with current web based telephone providers like Vonage or Ebay (Skype), and with traditional phone and cable companies such as Verizon, Comcast or AT&T.

Ooma, which is based on P2P technology, promises free unlimited service for life within the United States. Consumers will only need to buy the hardware (starting at $399) and have broadband Internet connection. That is a pretty good deal for a one time fee, mostly considering most VoIP services provide equipment for free but charge around $25 for monthly service fees.

The stylish Ooma box has answering machine capabilities and integrates a built in speaker. However, Ooma will not make profit on hardware sales only; the company plans to add additional for-pay features (such as customized ringtones) over time.

Moreover, Ooma counts with a remarkable management team, including technology notable such as TiVo co-founder Mike Ransay, former executives from Apple and Yahoo, and famous actor Ashton Kutcher (co-creator of MTV’s Punk’d reality show) as a Creative Director. Ooma’s CEO, Andrew Frame, became the youngest person ever to receive Cisco’s CCIE certification while working as a full-time employee.

The product will go on sale in September.

Nielsen//NetRatings, a leading online measurement firm, recently announced that will start ranking websites based on time spent on sites rather than the industry standard of page views.

The decision comes as online video websites, such as Google Video or YouTube, and new technologies such as AJAX, make page views less significant.

”Ajax, or AJAX (Asynchronous JavaScript and XML), is a web development technique used for creating interactive web applications. The intent is to make web pages feel more responsive by exchanging small amounts of data with the server behind the scenes, so that the entire web page does not have to be reloaded each time the user requests a change. This is intended to increase the web page’s interactivity, speed, functionality, and usability.” [Wikipedia]

This change might change the way advertisers, who currently use impressions as a figure that reflects the number of web pages per visitor, determine the value of a specific website.

By the moment, though, Nielsen//NetRatings will continue to provide page views figures, as well as “average number of sessions per visitors” and “average time spent” for each website, but it will start reporting total time spent and sessions for all visitors to give advertisers, investors and analysts a broader picture of what websites are more popular.

“Based on everything that’s going on with the influx of Ajax and streaming, we feel total minutes is the best gauge for site traffic,” said Scott Ross, director of product marketing at Nielsen. “We’re changing our stance on how the data should be” used.

comScore Media Metrix, Nielsen//NetRatings major rival, has also addressed the increasing use of AJAX with the development of site “visits” (number of times a visitor returns to a website with a break of at least a half-hour).