Online publishing company Wetpaint has been undergoing a strategic shift in its business model over the past year. Wetpaint began as a simple wiki/social publishing tool but then started to build entertainment sites for big brands, including MSN. And the heavily funded startup succumbed to layoffs last July and December. But today, Wetpaint is taking the company in a new direction: original content. The startup is launching Wetpaint Entertainment; a TV news site that covers news and gossip from over 15 major TV shows, such as Glee, Grey’s Anatomy, and Gossip Girl.

Each show has a dedicated online channel (the site is launching with 15 channels), and will compile the most popular photos, videos, fashion gossip, and headlines to provide one place for all the information about fans’ favorite shows.

Wetpaint’s founder and CEO Ben Elowitz says that each show will have roughly 20 posts of information per day and will include a live updating news feed on the homepage. Roughly 30 percent of the content on the site will be written and curated by Wetpaint editors while the 70 percent of content will be sourced from other sites. However, Elowitz says that editors won’t simply repost another site’s news with a link; Wetpaint will add its own editorial spin to repurposed content.

Wetpaint’s entertainment platform has also created Facebook pages for each show; allowing fans to interact with content and editors via the social network. The company says that 500,000 fans have joined Wetpaint’s Facebook pages over the past few months. In fact, Facebook, says Elowitz, is currently accounting for 40 percent of traffic to the site (which soft launched a few months ago). He believes that the cross platform integration with Facebook will help differentiate the site from its competitors. And with limited exposure during the soft launch, traffic to the site is growing by 50 percent monthly.

Starting today, Wetpaint Entertainment includes channels for “The Vampire Diaries,” “Grey’s Anatomy,” “America’s Next Top Model,” “Castle,” “Hellcats,” “Nikita,” “Glee,” “Dancing With The Stars,” “Top Chef,” “Pretty Little Liar,” “Bachelorette,” “The Bachelor,” “Gossip Girl,” “Jersey Shore” and “The Real Housewives of DC.”

The startup plans to launch mobile apps later this year and may eventually move into other verticals in entertainment and arts. At the moment, the site faces competition from many of the entertainment and gossip news sites that cover TV news such as Entertainment Weekly, People.com, and US Magazine.

Two dozen such sites are set to be launched over the next few months. These sites will specifically be powered by WetPaint Injected, its service which allows any site owner to place user generated content onto their sites. That’s exactly what MSN plans to do, as it will still house the sites, but will simply populate pages based on the content that fans create.

Though none are yet live, you can get a taste for how this might work with the WetPaint-powered page Showtime has for its show, The Tudors. It features a large community updating the site regularly, giving other fans pictures, video clips and commentary.

And what’s really nice about these WetPaint Injected-powered site is that they play nicely with search engines, WetPaint CEO Ben Elowitz tells me. With a lot of other widget add-ons that usually power fan pages hosted elsewhere, the search engine crawlers have trouble parsing the site, but WetPaint is SEO-friendly, and that has led to large increases in traffic from searchable terms that fans include on pages.

Elowitz notes that it’s nice to see MSN taking a lead in making its sites more socially friendly, when other large portals are strugling with that. And as a number of big names in entertainment and brands start to move to use fan pages on Facebook, he also notes that WetPaint-powered fan pages perform well when compared to Facebook fan pages. Generally, the WetPaint variety see 100 times the usage from fans when it comes to contributions and comments, he says.

Elowitz wouldn’t go into the specifics of the arangement with MSN, but notes that usually its outside business deals involve revenue sharing and/or some sort of fee for their service.

It seems to be a smart play by MSN. Why pay someone to do work that fans will do for free? Not only that, but fans tell other fans about the contributions their making, and it’s like built-in buzz for the community you’re targeting. And when you serve everyone who comes to these sites ads, you have a nice little, basically free, revenue stream right there.

WetPaint also has a smaller side project it’s working on in light of the recent shut down of Geocities. GARP, or Geocities Asset Recovery Plan, will allow stranded Geocities users to transfer their sites over to Wetpain using their migration kit. WetPaint is even offering to buy domains for the first thousand sites that migrate.

The round of financing was led by DAG Ventures, with investors from previous rounds also participating.

Wetpaint Injected was internally called “Balco” – it is an embeddable version of a Wetpaint wysiwyg wiki for third parties. It isn’t a simple javascript or Flash embed. It’s a deeper integration that requires an insertion of code into a site’s back end application files. That allows the wiki to be created at the server level, not simply rendered in the user’s browser like most widgets. The idea is a pretty straightforward way to go about doing this, but has significant SEO benefits for the partner because the wiki content is embedded directly into the HTML of the website.

The product can be tailored to match a site’s look and feel, and can use an existing sign in system to avoid new account registration. Launch partners include Flixster, IGN, and Nuwire (IGN screen shot to right, see it here). The product is free for publishers to use for up to 100,000 impressions per month – over that and Wetpaint charges either a revenue share or CMP basis.

The product isn’t just about wikis – they also have social features (profiles, friends, etc.), and added things like forums and, more recently, photo uploads, over time. In many ways they are more like Ning, which allows users to create social networks easily, than other pure wiki sites like Wikia.

The company has raised just $14.8 million in capital. Compare that to $104 million for Ning. But in terms of user adoption, the two are much more similar.

Comscore says Ning had 3.8 million monthly unique visitors in March, compared to 3 million for Wetpaint. Wetpaint says they now have 900,000 wiki sites and are adding 2,000 more per day – Ning has just 263,000 social networks. Wetpaint says they also have 3 million pages of content.

Ning’s traffic as reported by Comscore is still way above Wetpaint’s – 90 million monthly page views v. 18 million. But Wetpaint also allows users to put wikis under their own domain names, for free (Ning also allows this but charges a monthly fee). Most of Wetpaint’s biggest sites are under custom domains, they say, so a lot of their traffic isn’t reported by Comscore. They are probably still a lot smaller than Ning in terms of page views, but they are growing rapidly nonetheless.

Wetpaint has 70 sponsored sites now – wikis created by or for partners to promote specific brands or events. One example: HP has a community wiki on Wetpaint. Another: Showtime hosts wikis for all of their shows, like this one for The Tudors.

Given Ning’s success in raising capital and growing the number of networks on their platform, it isn’t surprising to see Wetpaint position themselves against them. Part of what makes Wetpaint different from other social networking sites, says CEO Ben Elowitz, is that people gather there under niche communities and do more than just share photos or videos – they create content around the things they are passionate about.

Wetpaint is also working on some other projects – including an embeddable wiki product called Project Balco, which we wrote about earlier this year – but won’t disclose many details yet.

Grou.ps is trying to fix that integration problem. They’ve created a service that lets you run all of your group’s collaboration tools from one Grou.ps domain using a single login. The system supports wikis, photos, links, blogs, calendars, chat, forums, maps, profiles, and subgroups – each of which is available as a plug-and-play module for your community. These modules also allow users to pull in their data from other third party services (flickr, Digg, blogs, more listed in the image below). Each module adds a new tab to your navigation bar where users can access the module’s features. Here’s an example group for Chemists worldwide.

While today marks their Beta launch in the US, the company already has over 150K members and 10K groups internationally (Chile and Turkey are most popular). Grou.ps is backed by Golden Horn Ventures.

Grou.ps isn’t the only startup trying to solve the integration problem. Ning and Wetpaint have integrated forums and various forms of media into their community products. Google and Zoho also have have very compelling collaboration suites. A single sign-on can get you chat, email, presentations, documents, wikis, and many other tools.

However, Grou.ps benefits from being simple like Ning and Wetpaint, yet focused on productivity like Google and Zoho. They present a simple free solution for moderated online collaboration.

Seattle based wiki-startup Wetpaint has been talking to a number of big content sites about a new product they’ll be releasing soon, we’ve heard. The screen shot above is a mock-up that Wetpaint is using to pitch potential partners.

The product is an embeddable wysiwyg wiki. That alone is interesting, just because there aren’t any easy ways to embed a wiki into third party sites today. Google Sites doesn’t yet allow embeds, for example. PBWiki, a popular wiki startup, does allow embeds via their API, but it isn’t as simple to use as most widgets.

But what we’re hearing is that this isn’t a simple javascript or Flash embed. It’s a deeper integration that requires an insertion of code into a site’s back end application files. That allows the wiki to be created at the server level, not simply rendered in the user’s browser like most widgets. The idea is a pretty straightforward way to go about doing this, although we haven’t heard of any products doing this before.

Why is that interesting? It’s interesting because it pulls the Wiki content directly into a site’s HTML and allows it to be indexed by search engines. That means partner sites will get the SEO benefits of the wiki, a major plus for these partners.

That’s all we know for now. The product is being called Balco, although that may be an internal project name, not the name of the to-be-launched product. If Balco is as useful as we’re hearing, it’s definitely something we’ll use here at TechCrunch.

Update: PBWiki’s David Weekly adds something related to this in his API documentation (scroll to bottom). When/if Wetpaint launches Balco, we’ll do a side by side comparison.

Personally, I find the UI to still be something that an engineer would love more than a graphic designer. But it is an improvement. Adding skins is a move in the right direction. What’s your favorite wiki?

The newly launched features are collectively called “Grouply Social” and include all the social networking features you’d expect. User profile pages show your interests, personal history, and contact information. The pages also support multimedia like most social networks, allowing users to share photos, videos, and “widgets” from sites like YouTube and Slide. Members can also befriend each other, with full privacy controls. You can decide who has access to your profile and what portions they can see, similar to Facebook.

The rest of the internet is clearly blowing past these older “groups” services when it comes to usability and engagement. Sites like Tangler, Wetpaint, and Klostu are creating whole new systems to bring online forums up to speed. As we’ve said before, Grouply is taking an evolutionary approach by absorbing users and data from existing systems and enhancing their functionality. Grouply recently raised over $1.3 million.

It may seem trite, but thousands of people are already creating unofficial wikis or joining communities (like fanpop) to talk about shows and products they love. Just Add Wetpaint gives businesses an easy way to generate an official community, as has been done with CSI, Dexter, Tmobile, the always-awesome Myth Busters, and even Oracle.

However, the move buts heads with other white label offerings (these) going after consumer brand communities, most notably Ning and Flux. Companies looking to launch their own communities will have to choose between the offerings (wikis and social networks).

Tonight they added new feature that should generate a lot of page views – they have fully integrated a forum/message board into every wiki.

This isn’t Tangler-level forums (which we consider to be the bleeding edge), but they’ve put a lot of thought into the feature set around these message boards. Posts can be tagged, the view expanded/contracted, there are email notifications of new messages, and the search feature works well. Any forum thread can also be turned into a wiki with a couple of clicks.

CEO Ben Elowitz says the two products go together well – wikis are great for evergreen content but don’t allow for good conversation. Forums allow great conversation but aren’t great for new readers. The hope is that by combining them they’ll allow for better content for all users. And in the process get a lot of page views.

Other startups innovating in the forum space (besides Tangler, mentioned above) are Meetro and Grouply.

The hosted wiki space is crowded, and Wetpaint competes with Wikia and PBWiki, among others. Comscore shows Wikia in the lead with over 3 million monthly uniques, followed by Wetpaint with 1.3 million and PBWiki with 770k (Wikipedia, of course, is the 800 pound gorilla, with 228 million unique monthly visitors):

Wetpaint’s key competitor, Wikia, has had more traction with users according to Alexa and Compete statistics, and claims 2.5 million page views per day. Wetpaint doesn’t disclose page views, but CEO Ben Elowitz told me they are “doubling quicker than every 2 months.” Wetpaint has a much more newbie-friendly user interface than Wikia, and is targeting a different audience. Frankly, it’s just a lot more pleasant to look at a typical Wetpaint site than a Wikia one, although the content on Wikia is often much deeper than the equivalent on Wetpaint. Wetpaint says they now have 150,000 unique wikis and over 2.5 million pieces of content contributed by users since launching last June.

Wetpaint has the smell of a company that’s built solid software and is seeing good user uptake. If they can keep expenses under control they will be a likely takeover candidate in the near future. Everyone except Google is taking a hard look at the wiki space right now.

For a good overview of wikis by feature, see WikiMatrix.

A good example wiki is this one around the XBOX 360. Like pbwiki, Wikia and JotSpot, Wetpaint is a hosted wiki solution with wysiwyg editing (no need to use wiki code or html). Each wiki (and each page on a wiki) is taggable, and Wetpaint includes higher end wiki functions like page lockdown, privacy, etc.

I created a wiki in about a minute and like the choice of templates. Wetpaint isn’t a fully customizable wiki, and you can’t run it on your own servers, but it is the best hosted wiki I’ve seen so far. Wetpaint is free, although all pages have contextual advertising included on them.

A lot of venture money is flowing into wiki products. Wetpaint raised just over $5 million in October 2005 from Trinity Ventures and Frazier Technology Ventures. The competition is well funded, too. JotSpot raised $5.2 million from Mayfield and Redpoint Ventures. Wikia has $4 million from Bessemer and Omidyar Network. And while pbwiki hasn’t raised outside financing, it does have a distribution deal with Yahoo that drives significant new users to the site.

Wetpaint is a little different than each of these. They are targeting the mass-edited wiki pages like Wikia, as well as smaller private and group wikis (think company project sites, intranets, social club sites, etc.). The service is incredibly easy to use (Jotspot comes close, but isn’t as mass-user friendly) – and it may bring a much larger audience to wikis than are currently comfortable using them.

You can get a good overview of how users interact with wiki’s built on the platform by going through the rather tedious tour. Basically, its a highly user-friendly wysiwyg-type wiki platform. To see an example wiki, check out the xbox 360 site they’ve created.

This is a hosted wiki solution, and Wetpaint’s business model is to add contextual advertising to each page of the wiki.

The company was founded last year and is backed by Trinity Ventures and Frazier Technology Ventures. See Silicon Beat, John Cook and Zoli Erdos for more.