The integration between the two services is seamless, though Picnik's design is clearly different from Picasa's and quite a few users will probably think that they've arrived on a non-Google site. As Jonathan Sposata, the product manager for Google Photos and Picnik's original founder told us yesterday, this was a conscious decision on Google's part. Just like YouTube and a few other Google properties, Picnik will retain its original branding. Google is also keeping Picnik's fee structure intact. Picasa should automatically recognize if a Picnik user has a paid or free account.

Google didn't add any new features to Picnik. Instead, Sposata told us, most of the work over the last few months went into migrating Picnik's back-end (which ran on a combination of Picnik's own servers and Amazon's S3 storage service) to Google's infrastructure.

What About Picasa on the Desktop?

Overall, this is a welcome addition to the online version of Picasa, as it enables users to perform relatively complex image editing functions right in the browser. Interestingly, though, there is now a very clear mismatch between the editing functions in the Picasa desktop client and the online version. Chances are that Google will soon rectify this situation. As Sposata told us, today's announcement is just "the first sign of many wonderful things to come." Judging from our discussion with Google, bringing more of Picnik's tools to more Google properties in the near future is definitely one of the team's current priorities.

For Google, this acquisition would make a lot of sense. After all, with Picasa Web Albums, Google offers one of the most popular online photo sharing sites and while it offers some basic editing features, it doesn't offer anything close to Picnik's feature set. Picasa, too, is one of the few Google services that still relies heavily on a desktop client and as Google continues to push its online services, it's only natural for Google to want to offer a better online photo editor as well. Indeed, according to Google own announcement, the company will work "hard on integration and new features."

The Picnik team will move to Google's Seattle offices and judging from the announcement, there will be no changes in the company's management and engineering time.

What about Picnik's Relationship with Flickr?

Picnik has a close partnership with Yahoo's Flickr, where it is the default photo editor. It will be interesting to see if Flickr plans to make any changes to this agreement in the near future. In today's announcement, Google notes that it plans to continue to support "all existing Picnik partners so that users will continue to be able to add their photos from other photo sharing sites, make edits in the cloud and then save and share to all relevant networks."

We contacted Yahoo and Flickr for a statement, but all we got so far was "no comment."

Twitgoo is a new competitor from Photobucket aiming to unseat the crown of the current Twitter photo-sharing site, TwitPic. It is a fairly unique service, trying very hard in a chameleon-like way to look very much like Twitter once you log in (using your Twitter username and password, or Twitter OAuth in the case of the Picnik partnership). The powers you grant Twitgoo go farther than just sending a tweet about a new photo. As we stated above, it can (if instructed) also update your Twitter background and user icon directly.

Finally, photos that are modified in Picnic and pushed to Twitter appear to come from Picnic on 'from' line below the tweet. This is a smart move on Picnik's part, they are all about trying to become the de facto standard for web-based photo retouching, and this will raise their profile more. Having used Picnik with Flickr for close to a year now, we can assure you that it is a very easy and fun editor to use, and the results it generates are spectacular. Give it a try, and tweet your results!

- Kottke on DIY book publishing (37Signals profit margin will probably be much higher than any royalties they would've got from a publishing company)

- eBay's Jason Steinhorn on convergence of browser and desktop (some interesting predictions, including that within 5 years '.com' branding will fade away)

- The IE7 team's radar screen (Jon Udell is pleased to hear that Microsoft is paying attention to browser compatibility issues now)

- Open AIM (AOL releases open API: "The AIM service is changing into an open and dynamic platform." -- Excellent!)

- Susan Mernit on Open AIM ("Of course, there is one catch--AOL still won't allow its' code to be used to link to other IM platforms.")

- Marc Canter is excited by AIM API ("There are almost 70M AIM users. Think about what you could do with that?)

- Ted Leonsis on Open AIM ("Our goal is to team up with developers to create a completely live and interactive experience across the Web and beyond.")

- Omnidrive beta and API ("With Omnidrive you can focus on making your product great while we take care of your storage matters.")

- arstechnica on Google GDrive ("Rumored to be in the works for some time, GDrive would offer users unlimited storage space for just about any kind of document.")

- Steve Rubel on beyond the blog ("...there is a burgeoning need for tools that help us cement all of the content that we want to track from our favorite galaxies into a unified interface.")

Flickr pic by 33mhz

TradeMe's founder, 29-year old kiwi Sam Morgan, stands to make over $220 million through the sale. Reading this report from local rag stuff.co.nz (owned by Fairfax), there are a lot of lessons which can be applied to the global 'web 2.0' space:

"In the seven years it has been running Trade Me has developed into the country's most visited website. It has 1.2 million members who are expected to host 35 million auctions this year, selling anything from second hand furniture and clothes through to antiques and cars.

Trade Me does not charge users to list an item for auction online, but charges a commission on each sale.

Trade Me has also gained a large slice of the classified advertising market, launching real estate classified ads last year and cars in 2003. Unlike auction items, Trade Me charges an upfront listing fee for classified ads and has over 34,000 cars and 15,000 properties are for sale or rent on the site.

Trade Me's growing slice of the classified advertising market was one of the reasons it was so attractive to Fairfax.

Peter Fowler, founder of the news and shopping website newswire.co.nz, said Trade Me's growing classified presence had been killing classified advertising in newspapers and cutting into Fairfax's revenues.

"Given that classified advertising has been the key to the profitability of newspapers, Fairfax has been forced to buy Trade Me or risk being overtaken by the Internet phenomenon," Mr Fowler said. "

Near on half a billion US dollars for an online auction and classifieds site which dominates a tiny 4 million people market? Wow.

"...it’s the little things in life that make you smarter. The little things don’t show up on Memeorandum. They do show up on RSS. Which is why I’m still subscribed to 847 smart people’s feeds."

I don’t think the problem is Memeorandum or news trackers per se, but then maybe Gabe could tweak the algorithm to weed out the flame wars and other stuff that isn't "tech". It’s not news, after all…