Highlight 1.2: Is it less creepy or are we just getting used to this?

"What are the odds," Highlight CEO Paul Davison asks, "that you'll have a connection with some random person sitting next to you in a coffee shop?"

He says that he's done the math and knows the answer: "The odds are pretty good." Especially with his app.

Highlight, which had its big coming-out party at SxSW this year, is all about helping people make connections based on common interests, activities, or social proximity. Pegged as the big deal app of SxSW before the show kicked off, it ended up not having quite the uptake of another big social app that hit it big at a previous SxSW: Twitter.

But Davison says the Highlight team continues to learn from the app and that the SxSW version was just the beginning. "It was so basic. It was just a tiny percentage of what we wanted to build." Today, the 1.2 version of Highlight comes out. It adds a few more ticks to the list of things Davison wants to do, and I think it makes the app worth checking out (again).

The app now allows you to post directly to people who are nearby, regardless of their interests or connection to you. My use case: I walk into Four Barrel coffee, a place so overcrowded with hipsters you can never find a seat, and post, "Hey, someone is stealing a fixie bike out front." Bam! Instant table availability. There are better applications for this feature, though.

Davison says the "post nearby" feature is like a hyperlocal Twitter, where the group is defined by proximity. That's a good way of looking at it. And unlike some other location-based messaging apps, in Highlight the messages are transitory; they don't stick to the place after you leave (although they do stay in the poster's profile).

You can also now write notes about people on their profiles, providing you're a Facebook friend. So now when someone sees a new contact pop up, they can see what other people say about that person. Users can delete notes about them that they don't like.

Other social interaction features are also getting tweaked. You can now Like and reply to a note directly from your feed of updates, and there's more Facebook integration, if you want it. Highlight can now also give you the interests you have in common with a connection.

Davison says the new version is also less power-hungry. He gives stats to back it up. If he's wrong, users will abandon this version as they did the last one.

Finally, Highlight gets a visual refresh. It's still not Path, but it's a good-looking app.

The more important changes to Highlight are the subtle and ongoing tweaks to the algorithms that connect people together. As Davison notes, just because you're near someone and share interests, it doesn't mean the app should alert you. If your smartphone is reporting to the app that you're moving at 60 mph, for example, you're probably in a car passing by someone, and there's not much to be gained by a proximity alert.

Of course, for many people, it's not the algorithms that they see as the problem, it's the very concept itself. Highlight can be seen as intrusive, or creepy. Davison reiterates that he is indeed doing social engineering and that tiny changes make big differences in users' perceptions. "With most new social things, people have said, it's weird, or it's creepy. But a subset says it's interesting, and they try it. Some people see that the cost to their privacy is worth it. It happened with Facebook, and with Twitter. It's our big social engineering challenge."

Davison gives a passionate pitch about making the world a better place with his app. "We accept that fact that we're going to live in a land of strangers," he says of the way the world works today. "You could walk right by someone you could love and never know it. It's a bad system."

He thinks that his app provides "ambient intimacy" and improves our connections with each other. He says we already advertise ourselves, hoping for a connection -- by wearing T-shirts, by hanging out at coffee shops that make statements, and with other cues (to the hipster reading a tattered print copy of "On the Road" at Four Barrel: you can be more subtle, but you've got the right idea). Highlight, Davison says, just makes these connections possible -- and much more likely.

"In the future," he says, "we'll be saying, 'I can't believe I used to walk around blind.'"

I'm trying Highlight again. I have loaded it up and turned off some of the new features that I didn't like (in particular, posting to Facebook when I encounter people or flag them), but already, at a startup event I was just at, it flagged a few good connections for me. I still feel like Highlight dangerously overshares information about me, but I admit to being less weirded out about this today than I was when I first covered the app back in March. Davison may be right: the world is changing, and apps like this are partly why.