After JotSpot’s takeover by search giant Google, one would think rival Socialtext would be shaking in its boots.

Instead, Socialtext CEO Ross Mayfield was busy creating a plan to steal JotSpot customers, offering them one year of Socialtext professional wiki service free. The Palo Alto, California-based company announced this offer Tuesday afternoon.

The move follows Google purchase of wiki and collaboration software maker JotSpot earlier Tuesday for an undisclosed sum (see Google Buys JotSpot). Google is trying to dominate the online world of collaboration and user-generated content with its latest offerings such as Google Docs and Spreadsheets and, now, with wikis.

The stakes are too high to roll over, Mr. Mayfield said. Half of US businesses will use wikis for collaboration by 2008, he said. Socialtext is close to profitability. “My goal is to grow this into a billion-dollar business,” he said.

To counter Google, Mr. Mayfield will take advantage of the fact that Google and JotSpot won’t allow new subscribers to create accounts on JotSpot until the service is integrated into Google, which could take several months.

And it may take even longer for Google to fully bake JotSpot into hits other offerings. For example Google launched Docs & Spreadsheets, an online word processor and spreadsheet offering a full seven months after buying online word processor Writely (see Google Buys Writely).

A Rising Tide for Wikis?

Meanwhile, JotSpot founder Joe Kraus argued the deal with Google is yet another sign that wikis are quickly becoming a mainstream business tool. Competitors such as Socialtext and Microsoft need not feel threatened by the Google deal, Mr. Kraus argued. “The truth is these things tend to create more opportunities than not for others raising the profile of the category,” he said.

So why then did Google buy JotSpot and not Socialtext? Mr. Kraus said Socialtext is more focused on selling to businesses, while JotSpot appealed more to the consumer. “[Google] viewed what we’re doing as very complementary to the bets that they had placed with Google Docs & Spreadsheets and Groups,” Mr. Kraus said

But Mr. Mayfield of rival Socialtext said Google picked JotSpot more for its talent.

“What they just acquired is a great search executive [Mr. Kraus],” Mr. Mayfield said, referring to Mr. Kraus’ background as founder and CEO of Excite.com. “Part of it is they acquired a good team led by people in the search industry to grow wikis as a mainstream solution.”

Mr. Kraus, 35, got the idea to start a wiki company in 2003 when he and fellow Excite.com co-founder Graham Spencer were thinking up ideas for a new business, and created a wiki to collaborate. He put in $200,000 of his personal wealth to start the company, which later got venture funding from Redpoint Ventures and Mayfield worth $4.5 million. “It was like a useful technology trapped in the land of nerds,” Mr. Kraus said.

Mr. Mayfield will have to hurry, because with Google’s backing, that country is about to get on the mainstream user’s map, big time.

Contact the writer: FBhuta@RedHerring.com

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