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Twitter’s entire premise is based on publicness. “Join the conversation in the global town square!” the company likes to say.

But, over the past year, Twitter has come around to seeing the value of being more discreet.

The company plans to significantly update its direct-messaging product in the near future, according to multiple sources, bringing the long-buried feature to the forefront for the first time in years.

Part of the new reemphasis on direct messaging is already here. For weeks, Twitter has been internally testing a setting that allows users to send and receive direct messages from others without needing to mutually follow one another. And, earlier this week, the company began to roll it out to the public in a limited capacity.

But Twitter’s new vision for direct messages will go further. It has kicked around the idea of launching a standalone direct-messaging application separate from the Twitter app, according to three people familiar with the matter. It is unclear, however, what form the final revamp of direct messages will take.

A Twitter spokesperson declined to comment when asked about future messaging plans.

Twitter’s move comes as a defensive riposte to personal-messaging apps such as WhatsApp, Line and KakaoTalk, all of which have drastically increased in popularity over the past two years. KakaoTalk, in particular, was mentioned as a threat in Twitter’s S-1 IPO documentation, filed earlier this month. To cope with such an increase in attention, other social networks, like Facebook and Path, have also made significant updates to their messaging capabilities.

Twitter paid specific attention to Snapchat, the massively popular ephemeral-messaging service, during its rapid ascent to popular use. Twitter even ran one of its own surveys, according to sources familiar with the matter, finding that people are indeed using Snapchat to engage more with others. And one of Twitter’s updates to Android tablet apps earlier this month borrows heavily from Snapchat’s in-message illustration features.


Earlier in the year, Twitter also met with employees from MessageMe, another popular mobile-messaging application, according to sources.

Moving private messaging up the food chain hasn’t always been in the company’s plans. At one point in Twitter’s history, employees discussed possibly killing direct messaging off altogether, according to multiple sources, making Twitter a truly public service once and for all. It is said that Jack Dorsey was one of the biggest proponents of the “all-public” version of Twitter.

Instead, Twitter went in a considerably less drastic direction. Under the direction of Dorsey and then product VP Satya Patel, the company launched a complete redesign of its desktop and mobile products in December of 2011, plucking the direct-messaging menu from the home screen and burying it under a separate, less visible menu. Eventually, the idea was that the product could have possibly been phased out.

Besides dealing with a public that wants personal-messaging services, Twitter also must attempt to solve its serious growth problem, one that seems to have alienated the service from becoming truly mainstream. The company hopes that an upcoming redesign will put an end to its retention issues and ultimately boost Twitter’s overall user ranks.

It is likely that we will see both updates before the year’s end, perhaps in time for the company’s much-anticipated initial public offering next month.


According to sources close to the situation, Twitter is planning on waiting until after its IPO – which is set to take place next week – to name its first woman to its board.

The move makes some level of sense, mostly because it would be difficult to have any new board member join the San Francisco-based social microblogging company now, given that that person would have to sign off on the public offering with little knowledge of its details.

Sources also added that while many are expecting Twitter to seek out a female director with media or tech experience – and there are many laudable candidates in both those areas – the company’s execs, especially CEO Dick Costolo, believe that one with international expertise is more important.

The reason is clear – Twitter is a global player, and runs into thorny issues all over the world around the proliferation of its open service. You might imagine that, in the future, as it grows, the company will face even more international conundrums that it will need a lot of mental heavy lifting to work out.

While the board had put former Secretary of State Hillary Clinton on the top of its overall list, she has not been contacted about joining as a director. She’s also likely to not be available, either, especially given that she is expected to run for the Democratic nomination for president of the United States in the 2016 election.

(Sorry, but she’s busy, boys! While Twitter chairman and co-founder Jack Dorsey will be bummed, most there actually considered her a very long shot.)

The number of women with international experience is also long. But if I were to bet on whom Twitter is considering for its top picks, I would name only two: Condoleezza Rice and Madeleine Albright.

Albright, among her many diplomatic roles, was the first woman to become the Secretary of State, named in the Clinton administration. She is now a professor of international relations at Georgetown University’s Walsh School of Foreign Service (disclosure: I went there), and is also chairman of the Albright Stonebridge Group, a global strategy firm.

Also – keep up, Peter Fenton! – she is fluent in French, Russian, Czech, Polish and Serbo-Croatian, serves on important boards such as the U.S. Department of Defense’s Defense Policy Board, and has written five books.

In addition – and this is just from my several encounters with her over the years – Albright takes no guff.

Neither does Rice, who also has some big cred in her corner. Along with other big government posts, she also served as Secretary of State under former President George W. Bush.

Rice also has some Silicon Valley links, both as a top administrator and professor at Stanford University, and her recent relationship with Khosla Ventures.

The VC firm signed a deal late last year with RiceHadleyGates, the international consulting firm that Rice runs, to “bring global and domestic insight to Khosla’s portfolio companies, helping them achieve their strategic goals in industries such as technology, energy, security and healthcare.”

No matter their gender – although that would also be a plus – either Rice or Albright would certainly be an asset for Twitter. The company has attracted not-undeserved scrutiny over not having a woman – or any diversity at all, really – on its board.

That board now includes: Former Netscape CFO and investor Peter Currie; former News Corp COO and Hollywood mogul Peter Chernin; Silicon Valley venture capitalist Peter Fenton, of Benchmark Capital; former DoubleClick CEO David Rosenblatt; Jack Dorsey (also CEO and founder of hot payments startup Square); co-founder and serial entrepreneur Evan Williams (now working on an innovative new publishing platform called Medium); and CEO Dick Costolo, who has already attracted controversy over the issue.

The lack of a woman on the board of a company is particularly glaring, given that numerous studies show that more women use Twitter than men, and that it is aiming to be a global company that represents, well, all of humanity.


According to sources close to the situation, Snapchat could announce its latest massive funding later this week.

Sources said the round being raised – up to $200 million – will come in part from China’s Internet giant Tencent and value the self-destructing mobile messaging startup from $3.6 billion to $4 billion. But, said sources, there are likely to be other new investors in the round.

AllThingsD broke the news of the possible funding last week.

The new funding comes only a few months after closing a Series B round of $60 million that valued Snapchat at $800 million.

While such a deal could still be delayed or even fall apart, sources said it was on track to be announced as early as this Thursday.

A spokeswoman for Snapchat did not as yet return an email and text requesting comment.

The move by the Los Angeles-based Snapchat is the second giant funding of late of a small Internet startup with little to no revenue.

Social scrapbooking company Pinterest announced earlier this week that it just raised $225 million at a $3.8 billion valuation.

But investors are piling on, hoping to grab an early hold on the next Twitter or Facebook.

Launched in 2011, Snapchat has grown wildly popular in a relatively short span of time, effectively creating an entirely new genre of messaging category with its “ephemeral” pictures and videos that last for only a matter of seconds.

Snapchat’s last round was led by Institutional Venture Partners, with participation from General Catalyst Partners and SV Angel. Previous investors Benchmark Capital and Lightspeed Venture Partners also participated. With that round, the company had raised around $75 million in total.

At the time of the June funding, in an interview with AllThingsD, Snapchat CEO Evan Spiegel noted: “We’re excited about in-app transactions because of what we’ve seen in the Asian markets.”

He has called out Tencent specifically in a series of interviews as being an innovative player there.

The interest in investing is because the mobile Snapchat app has proved so popular and has become global. It has also become potentially worrisome to established social players – so much so that sources said when Spiegel continually rebuffed Facebook CEO Mark Zuckerberg’s acquisition offers, Zuckerberg cloned the app outright with a service called Poke. Zuckerberg’s offering famously flopped, while Snapchat continues to grow.

Most recently, Snapchat has begun to experiment with features outside of its core ephemeral messaging service. The company launched its Stories product last month, essentially a long-form play on Facebook’s status update in the form of a picture or video. And recently, Spiegel has grown more keen on the idea of monetization, experimenting with bands and listening to music inside the app.

When Microsoft co-founder and CEO Bill Gates handed the reins of the tech giant to his longtime comrade and right-hand man Steve Ballmer in January 2000, the path was fairly clear.


After some bumps, the company was finally transitioning into an Internet era, but the PC was assured of a prominent place, and its flagship Windows was still the king of the computing world.

Things are quite different 13 years later, as Ballmer announced his plan to step down in 12 months.

In fact, Ballmer is leaving whoever will eventually take over for him with a substantially weaker and less influential company, which has just made yet another organizational change to head down an uncertain path toward something Microsoft calls being a “devices and services” company.

It’s clearly not a very pretty legacy, mostly due to larger external trends that were impossible to resist, and stubborn management by Ballmer who tried too hard to resist them.

In fact, Ballmer was famous for discounting pretty much all of the products that have defined the recent computing age.

His comments about the iPhone in 2007 to USA Today distill it perfectly: “There’s no chance that the iPhone is going to get any significant market share. No chance.”

The result of such thinking? The PC industry is tanking, and Microsoft’s longtime partners are struggling in an era where mobile devices – mostly made by others – are flourishing.

Windows 8 was a stab at redefining the company’s operating system for a world sure to be dominated by mobile devices. But, as shown by the tepid response to the software – and to the initial Surface tablet device the company makes itself – Microsoft has a long way to go in that effort.

It’s like that across the Microsoft empire, which too often feels like it is in its sunset.

In phones, Microsoft has thus far decided not to make its own products, casting its lot largely with Nokia, although the company is said to have some phone designs of its own in the back pocket, if not the front. But so far those efforts lag well behind mobile rulers Apple and Google.

In search, Bing has established itself as the only real rival to Google, but Microsoft remains a distant runner-up, without a clear path to significant profits.

Microsoft retains a key spot in core business software, but the dual trends of cloud services and the consumerization of corporate technology mean that many of today’s young companies are forsaking traditional software in favor of options from Google, Salesforce.com and others.

The continued strength in the business sector played to Ballmer’s own abilities and interests, of course. But in an era of fast-moving apps, mobile-first mentalities, and the need for nimbleness and speed over brute force, he had become the wrong leader for Microsoft.

Perhaps that’s why Ballmer recently tried to redefine the company as being “One Microsoft.”

In a memo to employees, Ballmer had written, “we are rallying behind a single strategy as one company – not a collection of divisional strategies,” and that the changes “will enable us to execute even better on our strategy to deliver a family of devices and services that best empower people for the activities they value most and the enterprise extensions and services that are most valuable to business.”

Later, in another memo, titled “Transforming Our Company,” Ballmer added, “as the times change, so must our company.”

Indeed, and just now the other shoe in that sentiment just dropped, perhaps as it had to and as it should have.


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A handful of times a year, clusters of Twitter engineers will line the walls of the company’s cavernous main hall, gathering around smartphones, monitors or poster board setups. The large, open-air room buzzes with excitement as employees show off the slap-dash project they hacked together over the past four days. It is Twitter’s officially sanctioned “Hack Week” – a time where all bets are off and employees can work on whatever they want.

Project Mixtape, for example, was a way to suggest and send a list of good people to follow for any friends you’ve invited to try Twitter for the first time. Another group’s project involved a small Vine button stuck inside the Twitter app, a quick way to take and tweet videos inside of Twitter proper. And one set of engineers developed a way to play with location-based discovery of nearby users and tweets from people you weren’t following.

Many employees see the event – the Friday that ends Hack Week – as Twitter at its best, a testament to the company’s capacity for innovation.

But some view these days as among the most depressing of the year: A parade of Twitter features that will never see the light of day.

The Problem

Simply put, Twitter has a product problem. Engineers inside the company have long grumbled that there are few direct paths for moving product changes up the ladder at an efficient pace. Twitter’s occasional “experiments,” or ideas for change, sometimes sit in their requisite testing phase with 1 percent of users for an inordinately long amount of time, stagnating without any decision being made to move the product forward or kill it.


In a nutshell: It’s a product culture that’s basically the opposite of Facebook’s. Where the social giant is willing to “move fast and break things,” sometimes pushing out new features in the span of weeks, changes to Twitter’s core product often languish for months – or even years – in limbo.

While the issue is hardly a new one for the company – product pipeline problems have plagued Twitter for years – the stakes now are especially high; Twitter has to answer to the public markets, as well as to its public user base. Being slow to innovate, or even to iterate, could affect the company’s ability to push its microblogging service deep into the mainstream. And to some degree, it has inhibited the company’s ability to retain talent. Twitter has already lost a number of engineers and product managers who were frustrated by its failure to ship things in a timely manner.

The problem’s origins are two-fold, sources said. The product divisions are messy, with an absence of efficiency and sometimes a lack of clarity around which executive has the last word on whether a feature change is good enough to ship. Many in the organization have also expressed frustrations about working with Michael Sippey, Twitter’s VP of product, whose hesitation on pushing changes through has created problems with some middle managers. (My colleague Peter Kafka interviewed Sippey at our Dive into Mobile conference last spring.)

The other problem is perhaps the larger one: Twitter’s aversion to risk when it comes to its marquee product, the core Twitter timeline. According to sources, some of Twitter’s top people – including a few from the company’s executive ranks – fear any major changes will meddle with the company’s revenue products. These products, in just a handful of years, took Twitter’s revenue from zero to hundreds of millions of dollars.

As one insider put it: “Twitter hasn’t been playing to win. It’s playing not to lose.”

When asked, Twitter declined comment on any current or future product plans.

The Solution?

The situation isn’t hopeless.

Twitter has shown some willingness to change in just the past few months. A few weeks ago, IT pushed out in-stream photos and Vine videos in a major enhancement to the home stream – an area the company rarely touches.

It should be noted, however, that these changes had been ready to go for years, according to sources, born out of an idea called “Project Skyline” – the result of yet another Twitter Hack Week. Due to its existential product struggles, however, Twitter didn’t push the new design out the door until this October.


The company also introduced a thin blue line to its app recently, an attempt to make it easier for infrequent users to get up to speed on conversations happening between people they follow.

But that, too, was controversial. According to one senior Twitter executive, the company considered killing off the blue line altogether just weeks after introducing it to widespread dissatisfaction. (Whether Twitter will actually go through with killing the conversations line isn’t clear. For now, Twitter swapped the blue for a gray line, one hopefully less obtrusive to users.)

Twitter is also working on its personnel problem. Sources tell AllThingsD that VP Michael Sippey now reports to COO Ali Rowghani on growth and product issues instead of directly to CEO Dick Costolo and the board – an apparent demotion. That may help with some of the complaints around process and expediency. Multiple insiders, however, said this move was a head-scratcher, seeing as Rowghani has little background in growth and product issues. Not to mention that it is atypical for a tech company’s VP of product to report to the COO.

The biggest indicator of a product division shift: Twitter’s upcoming redesign, a makeover which truly attempts to court the mainstream. We’ll hopefully see that, or steps toward it, before the end of the year.

Keep in mind, this “Twitter reinventing itself” story is nothing new. Twitter has already undergone multiple internal reorgs in the span of just two years, removing some product and engineering execs and replacing them with others – all to no avail.

Perhaps, if the product division can truly change its mentality, the company will actually start to live up to its somewhat ironic “#shipit” motto that some employees chant.

As always, though, there’s no guarantee it’ll actually work.

breaking bad huell's money bed

BlackBerry executive chair and interim CEO John Chen just accepted what is arguably the most challenging job in tech – and perhaps the worst, as well. But he’s being well compensated for taking it on.

Documents filed with the Securities and Exchange Commission show that Chen is to receive a yearly salary of $1 million, along with a performance bonus of $2 million. He has also been awarded 13 million restricted shares in the company.

Currently worth about $85 million, those shares are scheduled to vest over the next five years. A quarter of them will become payable after three years, another quarter after four years, and the remaining 50 percent after five years.

It’s a massive compensation package, particularly for a company undergoing a brutal restructuring that will see it sack some 4,500 employees. But evidently it was crucial to bringing Chen onboard. “Once we saw John Chen, we had to work to make sure we could attract him,” Prem Watsa, CEO of BlackBerry’s largest shareholder, Fairfax Financial, said of Chen’s deal.

And, to be fair, Chen does seem a promising hire for the foundering BlackBerry. He has turned around a similarly troubled business before: Sybase. When Chen joined that company as CEO in 1998, it was nearly at death’s door. Some 13 years later, Chen had sold it to SAP for $5.8 billion – more than 15 times the company’s market cap when he took up the reins.

Several sources confirm that Apple is in talks to buy 3-D sensing company PrimeSense, following a report in the Israeli publication Calcalist. However, those sources stressed that the deal is not yet done, and that its reported valuation would not represent a huge win for investors.


Calcalist put the value of the deal at $345 million. Sources said that talks are “close” to complete, but are hung up on end-game issues like liquidity preferences – in other words, who gets paid first. One also said the price could be slightly higher than reported, on the order of $20 million more.

Sources noted that the expected value of the deal would not be a big jump over where investors had recently valued the company, which was apparently at about $250 million.

One source with knowledge of the situation said it was “a bit of a letdown, but a decent outcome.” Another called it “the best that could happen, given the circumstances: A big strategic buyer at a decent price.”

But, again, while the deal is expected to close by the end of this week, it is not yet done.

PrimeSense was the original supplier for Microsoft’s breakthrough Kinect gaming device, which incorporated cameras and depth sensors so that players could control games with their gestures. But Microsoft used homegrown technology for the new Kinect that is part of Xbox One.

The original PrimeSense model was oriented around a large stationary sensor, but the company more recently released a smaller generation, dubbed Capri, better suited for mobile uses.

Motion sensing could be valuable for any number of actual and hypothetical Apple products, including wearable devices and televisions.

Apple declined comment, and PrimeSense offered a statement:

“PrimeSense is the leading 3D technology in the market. We are focused on building a prosperous company while bringing 3D sensing and Natural Interaction to the mass market in a variety of markets such as interactive living room and mobile devices. We do not comment on what any of our partners, customers or potential customers are doing and we do not relate to rumors or re-cycled rumors.”

Acording to published funding numbers, eight-year-old PrimeSense had raised relatively little money – but that’s not actually the case. Silver Lake had invested an undisclosed amount in PrimeSense in 2011. A source said the amount of the Silver Lake investment was $50 million, and that there had also been a large secondary sale of shares at the $250 million valuation.

Prior to that, the company had raised about $30 million from venture capitalists including Canaan Partners, Gemini Israel and Genesis Partners.

(Kara Swisher and John Paczkowski contributed to this report.)


The recent management shake-up at chip giant Intel has claimed its first high-profile casualty. Dadi “David” Perlmutter, a well-respected executive VP who had been a leading but unsuccessful contender in the race to succeed former CEO Paul Otellini, will be leaving the company early next year, after 34 years.

Intel confirmed the move in a regulatory filing made public today.

Perlmutter, who heads up Intel’s Architecture group, the business unit that designs and manufacturers its chips that go into personal computers, servers and other devices, will leave the company in February.

After Otellini announced that he would retire earlier than expected last year, Perlmutter (pictured below) was among the candidates who pitched Intel’s board of directors on the CEO job, but lost out to the unusual joint offering of then-COO Brian Krzanich and president Rene James.


Perlmutter’s departure isn’t entirely surprising. Within days of Krzanich taking over as CEO, there were reports that he had moved to take direct control over Intel’s Architecture Group, and had delegated Perlmutter to a vaguely described transitional role, though Intel never made that role official.

Regulatory filings show that Perlmutter made about $15.7 million in total compensation from Intel last year, and, as of February of this year, he owned 1,968,599 shares of Intel worth nearly $47 million at today’s share price.

Perlmutter, a native of Israel, had long been seen as the company’s “Mr. Inside,” possessing a skill for getting things done. He was less effective at the public-facing portions of the jobs. A keynote he gave in Sept. 2012 – intended to reignite some excitement around Intel’s strategic plans to improve personal computers amid flagging sales – fell pretty flat.

His first big success at Intel came with the Centrino line of mobile processors that launched in 2003 and soon dominated the notebook market. Later, he was responsible for the Core line of chips that effectively replaced Intel’s longtime Pentium brand of PC processors.

Intel shares fell 41 cents, or 1.75 percent, to $23.66. The shares are up by nearly 15 percent this year.

Here’s how Intel described the move in the 8-K filing made public this morning:

“On October 18, 2013, David Perlmutter, Executive Vice President and General Manager, Intel Architecture Group, notified Intel Corporation (“Intel”) of his intention to leave Intel effective February 20, 2014, the 34th anniversary of his start of employment at Intel, to pursue other opportunities in his life and professional career. Throughout his career at Intel, Mr. Perlmutter led many of the product, technology and business transformations at Intel.

Until his departure in February 2014, Mr. Perlmutter will provide transition assistance to Intel’s Platform Engineering Group and on other matters as requested by management and will continue to participate in all applicable Intel compensation and benefit plans and arrangements. Mr. Perlmutter will receive post-employment benefits as described in the “Executive Compensation” section of Intel’s proxy statement filed with the Securities and Exchange Commission on April 3, 2013, including acceleration of the vesting of certain equity awards pursuant to company policy for employees age 60 or over and relocation assistance under the terms of Mr. Perlmutter’s relocation agreement.”

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