Good news for Picasa users! It appears that Google has acquired NevenVision and according to the Google Blog their technology will be used to improve image search.
More information from the Official Google Blog:
We've been working to make Picasa (Google's free photo-organizing software) even better when it comes to searching for your own photos—to make finding them be as easy as finding stuff on the web. Luckily we've found some people who share this goal, and are excited that the Neven Vision team is now part of Google.
Neven Vision comes to Google with deep technology and expertise around automatically extracting information from a photo. It could be as simple as detecting whether or not a photo contains a person, or, one day, as complex as recognizing people, places, and objects. This technology just may make it a lot easier for you to organize and find the photos you care about.
Documenting Picasa has more info regarding the acquisition and Beta News goes into a little bit more detail about NevenVision.
Note: It looks like AOL is getting jealous of the photo social networking wars, and had decided to jump into the battle.