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I am sure many of you already heard the buzz about this "Secret Google Lab" rumor. Let me give you the timeline of events, that I know of, on how it broke the news. On September 19th, 2004 a WebmasterWorld thread was created asking about a strange referral string found within this member's log.
eval.google.com/happier/quest/altcache?local=/www/data/....
Yesterday, news has spread like wild fire via Slashdot about a flash video and blog entry posted at SearchBistro. The flash movie can be viewed here, might be slow...
There are tons of blogs discussing this now, I'll point out Social Patterns and SEW Blog, but there are others.
DigitalPoint forums was one of the first to have a thread on this topic. There is also a thread at Search Engine Watch Forums.
Manual, humor review of specific sites or an automated method of rating results and having an algorithm do the auto-adjusting. Somewhat like artificial intelligence with a bit of help.
