Former-eBay-exec-turned-Omidyar-partner Matt Halprin will become the ninth member of the Wikimedia Board of Trustees as part of the deal.

“The Internet is a great phenomena. I don’t see how the emergence of more information content on a network can be a bad thing for the personal computer industry. Will it cause less personal computers to sell? I think quite the opposite. Less copies of Flight Simulator or Encarta?”

– Microsoft chairman Bill Gates, 1994

In January, Wikipedia claimed nearly 97 percent of the visits that Web surfers in the United States made to online encyclopedias, according to research outfit Hitwise. MSN Encarta received 1.27 percent. Little wonder, then, that Microsoft (MSFT) is discontinuing it. The company announced Monday that it would stop selling Encarta software by June and would shut down the encyclopedia’s MSN Web sites on Oct. 31. “Encarta has been a popular product around the world for many years,” Microsoft said in a statement. However, the category of traditional encyclopedias and reference material has changed. People today seek and consume information in considerably different ways than in years past. As part of Microsoft’s goal to deliver the most effective and engaging resources for today’s consumer, it has made the decision to exit the Encarta business.”

Translation: Wikipedia ate our lunch–and our breakfast and dinner too. For evidence, one need look no further than Wikipedia itself, which updated its Encarta entry with the following passage within an hour of Microsoft’s announcement.

“Microsoft announced in March 2009 that they will cease to sell Microsoft Student and all editions of Encarta Premium software products worldwide by June 2009, citing changes in the way people seek information and in the traditional encyclopedia and reference material market as the key reasons behind the termination….Additionally, MSN Encarta web sites will be discontinued by October 31, 2009, with the exception of Encarta Japan which will be discontinued on December 31, 2009.”

This afternoon, Microsoft said it will acquire the search start-up for a sum believed to be more than $100 million.

Coming as it does in the aftermath of Microsoft’s failed effort to buy Yahoo, the acquisition is an interesting one. Powerset is no Yahoo. That said, it’s in some ways better.

Powerset specializes in so-called “natural language” search, which is meant to understand the intent and meaning behind the words in search queries–so that, for example, a search engine could understand the difference between a search for “yahoo” the exclamation, and “Yahoo” the search company Microsoft didn’t buy. Powerset searches the Web–well, at this point, just Wikipedia–semantically. And that’s a handy skill to have when your competing with Google (GOOG), which isn’t yet able to search the Web in that way.

Said Harvard Business School professor Andrei Hagiu, “Microsoft’s acquisition of Powerset makes perfect sense and is probably the best shot at a disruptive technology that might allow it to leapfrog Google.”

Yesterday the company announced Knol (defined as a “unit of knowledge”) , its improvement on the social encyclopedia. With it, the company hopes to encourage experts on a particular subject to write authoritative articles about them, which it can then rank. “The key idea behind the Knol project is to highlight authors,” Google VP of Engineering Udi Manber wrote on the company’s blog. “Books have authors’ names right on the cover, news articles have bylines, scientific articles always have authors–but somehow the Web evolved without a strong standard to keep authors’ names highlighted. A Knol on a particular topic is meant to be the first thing someone who searches for this topic for the first time will want to read.”

Oh, and one other thing: “At the discretion of the author, a Knol may include ads. If an author chooses to include ads, Google will provide the author with substantial revenue share from the proceeds of those ads.”

Ah.

Interesting idea, developing an alternative to Wikipedia that rewards contributors for their work with not just a byline, but financial compensation as well. And an easy way to redirect all the traffic Google sends to Wikipedia back to Google itself.

To keep you abreast of tech news while he’s away, we’re compiling a daily digest of 10 must-read tech stories. We’re calling it the Tech 10 and it appears below.

1. Although they made no jokes about their secret marriage, as did Apple’s Steve Jobs when he appeared with Microsoft’s Bill Gates at D5 in May, the CEO schmoozefest between Steve Ballmer of Microsoft and John Chambers of Cisco today in New York City yielded news of increased cooperation between the two tech giants, according to eWeek. Ballmer also deflected questions from moderator Charlie Rose about whether Microsoft was contemplating acquiring Yahoo, writes Elizabeth Montalbano of IDG News Service.
2. Adobe’s Media Player isn’t quite ready for show time: the eagerly awaited player won’t be fully released until next year. In an exclusive, Beet.TV’s Andy Plesser gets the word from an Adobe spokesman and posts a video interview with Adobe’s Chris Hock, head of its Flash media group.
3. Paramount Pictures and DreamWorks have chosen HD DVD over competing technology Blu-Ray as a means of releasing their DVD movie titles, according to FT.com. The decision heats up the DVD format battle, as media companies consider which technology provides a better viewing experience.
4. With little fanfare, Hewlett-Packard has debuted Cloudprint, a free service enabling users to print documents on any printer from almost any location worldwide. According to the New York Times, the innovation came after H-P wondered earlier this year how it might piggyback on the release of Apple’s iPhone.
5. Speaking of the iPhone (left), recycling is already catching on. This week, Apple is bringing out refurbished iPhones at the online Apple store. Engadget notes that the company is discounting the reconditioned handsets by $100 for both models.
6. Skype, reports the Register, is blaming its outage woes last week on a flood of users downloading a routine security patch. The VOIP provider has also issued an apology for the “unprecedented” service interruption, which for some users lasted into the weekend.
7. Google is flexing its muscle in China. Reuters reports that the search colossus has bought a stake in a Chinese community Web site called Tianya.cn. The move in the second-largest Internet market in the world marks Google’s growing interest in social networking.
8. Tilera Corp., a start-up in Silicon Valley, has revealed details of its 64-processor chip. The Wall Street Journal says that the chip and its underlying design could be used in products that have upward of a thousand calculating engines.
9. A multistage attack has left job-search site Monster.com reeling from a potentially huge stolen-data headache. Computerworld disclosed that more than 1.6 million records belonging to several hundred thousand people have been compromised by a Trojan horse program that could plant malware on their computers.



10. Who’s behind those mysterious edits to the entries on Wikipedia? Why, the very corporations written about. According to Wired, Wikipedia Scanner, a data-mining service launched earlier this month, has shown that millions of entry changes can be tracked to corporate “editors.”

–posted by Associate Editor John Sullivan