Surprise, Apple’s iPad Mini With Retina Display Now On Sale Starting At $399

The Apple Store has come back online after a surprise outage this evening and the previously announced iPad Mini with Retina display is now on sale. The sale data had not been announced previously, Apple had only specified ‘November’.

Springing a release out like this unannounced is somewhat of a surprise for many, who will wake up tomorrow morning likely with slipping ship dates.

The pricing begins at $399 for the 16GB WiFi model and $529 for the 16GB LTE model. The top of the range is the 128GB with cellular connectivity for $829.

As of time of publish, shipping times were 1-3 business days for the 16GB and 32GB WiFi models and 5-10 business days for the cellular models. Some are seeing delivery times anywhere from November 19th through December 5th. Though Apple CEO Tim Cook used the phrase ‘it’s going to be an iPad Christmas’ on its earnings call, he also acknowledged that not everyone who wanted an iPad mini would be able to get one before the year was out due to supply constraints. So if you must have one, you should probably hop to it.

Though a leaked internal document showed a small sampling of countries would be able to order the device today, we’re seeing countries outside of those few (which included Australia, China, Hong Kong, Japan, New Zealand, Singapore and the US) able to order.

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Surprise, Apple’s iPad Mini With Retina Display Now On Sale Starting At $399

If you’ve got some curiosity about the new iPad Mini with Retina display left over, you can check out our full hands-on here.

This Is Apple’s New Mothership Of An HQ

The most realistic and detailed images yet of Apple’s new spaceship headquarters have just been published in an awesome piece onWired.

The latest images of the 2.8 million square-foot campus show an expansive cafeteria, an underground parking garage, and a subterranean auditorium where forthcoming Apple products will be unveiled to the media.

The office will sit on a 176-acre plot of land, most of which will be dedicated to indigenous flora and fauna to act as a barrier between the floor-to-ceiling glass walls and the outside world.

There will also be separate facilities outside of the main campus for R&D.

Enjoy a peek inside the new Apple campus, and make sure to check out Apple CFO Peter Oppenheimer’s presentation after the approval of the campus, and/or Steve Jobs’ initial presentation to the city of Cupertino.

“It’s Just A Big iPod Touch”

Over the weekend, I got two emails from my mother. The most interesting aspect of them was the sign-off at the bottom: “Sent from my iPad”.

This stood out to me for two reasons: First, I’ve now been using the iPad Air for the past couple of weeks, and thinking a lot about the state of the product. Second, this is my mother using an iPad. An iPad! Regularly!

On a scale of 1 to 10 when it comes to tech savviness, I’d generously give my mother a 2. Sorry mom — but I think she’d (reluctantly) agree. Some of my earliest childhood memories revolve around “fixing” the television for her. “Fixing” here often meaning selecting the correct input or making sure the power was in fact on. Later, I would put the same work into the VCR. Then the computer.

She certainly doesn’t hate technology, but it doesn’t seem to get along too well with her. And I know that the rapid pace of change in tech has been a source of frustration for her throughout the years. Just when she learns how to use one thing, the entire world changes. I completely understand her reluctance to embrace any new technology.

So again, imagine my amazement when I saw the telltale sign of iPad usage: that email signature.

To be clear, I’m the one who gave her the iPad. About a year ago, I gave her an iPad 2, knowing her computer (my old, old, old computer) was likely on its last legs. And while I gave her a walk-through of how to use the new device, I didn’t expect it to stick. After all, not only was she not an iPhone user, she wasn’t even a smartphone user. The idea of “apps” was a foreign one to her. I’m guessing the only times she was regularly using a touchscreen was at an ATM.

And yet, “Sent from my iPad”.

So I did what any fascinated tech blogger would do: I emailed my mother a series of questions about her usage of the iPad. Her response was illuminating:

So yes, I like the iPad, but I miss a keyboard. I don’t like this touchpad. But I use it now in place of my old computer. I go on Pinterest. But I am having a few issues (as usual). It just shuts down and the Apple appears on the black screen. Must be that I’m using it too much? I use it for email, Facebook, and checking things out. Love you. Xoxox

Sent from my iPad

I’m not 100 percent sure this is the perfect response from an “average” iPad user of a certain age, but I’d bet it’s pretty close. “Miss a keyboard.” “I go on Pinterest.” “Email.” “Facebook.” “Checking things out.”

The iPad has become a full-on computer replacement for my mother. And beyond the keyboard quibble, it sure seems to be a more than adequate one for her.

So I have to laugh when I think back to the unveiling of the original iPad nearly four years ago. At the time, a not insignificant portion of the population seemed to write it off as “just a big iPod touch.”

That included Nintendo president Satoru Iwata. Meanwhile, in their last reported fiscal year, Nintendo did $6 billion in sales. The iPad? $32 billion. Yes, the iPad alone is now roughly five times the business of all of Nintendo.

My mother would never use an iPod touch. But she is using an iPad. And I’ve been thinking about this in the context of the iPad Air.

I’ve been torn between whether or not I’d rather have the forthcoming retina iPad mini or the svelte iPad Air. Using the Air these past two weeks has just led to more conflict in my head. I can come up with perfect use cases for both devices (before having regularly used the retina iPad mini, of course).

And while a lot of people I know in the tech scene seem to be firmly in the retina iPad mini camp, I think of users like my mother, who I don’t think would like the mini as much as the Air. In fact, she saw my first generation iPad mini last year and thought it was too small. Remember, she’s using the iPad as a computer replacement.

So this iPad Air would seem to be the perfect device for her. It maintains the same screen size and battery life of the elder iPads. But it’s now significantly lighter and faster.

I’ve been thinking about my mother’s remarks about the keyboard/touchscreen as well. It’s fairly remarkable that it’s the only real source of pain at this point in her transition from a laptop to the iPad. (Well, beyond the Apple black restart screen of death, which I see all the time too — what’s going on here, Apple? Unlike my mother, I know it’s not due to overuse.)

I’m actually sort of surprised Apple hasn’t attempted to do something interesting in the keyboard accessory space. Yes, it may mean copying Microsoft. And yes, it may mean admitting that typing on a physical keyboard is easier than a virtual one. And yes, Apple won that battle on the phone side of things. But this is different.

Apple won the phone touchscreen keyboard battle versus the physical keyboards because most people were not used to any keyboard (beyond the number keys) on their phones when the iPhone launched. It was only BlackBerry users that were the longtime diehard holdouts since they had known the physical keyboard world and had a hard time adapting to the new world order.

And while the tablet space was also relatively new and so there was no entrenched keyboard power, a lot of people are coming to the iPad from the PC and using it as a replacement. People like my mother. She longs for that keyboard.

Of course, there are a number of good third-party keyboard options for the iPad. I’ve long had and loved the Logitech variety (though not the one for the iPad mini, it’s too small for my taste). And it’s great that Apple’s own iOS software accommodates these third-party devices. Which again is why I’m sort of surprised Apple itself hasn’t made a move here.

The iPad may not be a PC, but there are a lot of users who are now using it in lieu of a PC. And while kids growing up today may be fine using a virtual keyboard having never have really known a physical keyboard (and not sending nearly as much email as the rest of us), there are probably tens of millions of users — if not more — who would make the jump to an iPad if there was some sort of physical keyboard option.

Which is undoubtedly exactly why Microsoft made the Surface keyboard covers.

All of this is a long-winded way of getting to the real question: is the iPad finally good enough to be your only computer? For the vast majority of people reading this on TechCrunch, the answer is undoubtedly still “no”. But for my mother, the answer is clearly “yes”.

And that’s the iPad 2. Holding an iPad 2 next to the iPad Air now feels like night and day. Truth be told, the iPad Air actually feels a lot more like an iPad mini than any of the older 9.7-inch iPads thanks to the trimmed down sides.

I mainly carry around an 11-inch MacBook Air these days as my work machine, but when the Logitech keyboard is available for the iPad Air, I’ll be tempted to make the jump myself. The difference in size and weight may not seem like much on paper, but it’s actually just about the weight of an iPad 2. (A bit more with the keyboard, obviously — though I wouldn’t carry it around all the time, just when I knew I had to do a lot of typing.)

But again, what’s most interesting to me here isn’t my own usage. I’m clearly an edge-case that will go out of my way to try to make the iPad Air fit into my life while casting my computer to the sideline in the name of progress. My mother is a common user. All she wants to do is pin things on Pinterest, post things on Facebook, and send some emails. She wants convenience, portability, and simplicity. And she’s iPad-only.

And this new iPad Air is better in every way compared to the iPad 2 (except now in price). Those people still using an old 8 pound HP machine that runs so hot that you can cook an egg on it, must be looking at the iPad Air and salivating. It’s salvation — perhaps just minus a keyboard. It’s a device clearly accessible to the computing mainstream.

One thing it’s not: a big iPod touch.

Hired.com Looks To Destroy Recruiting Invoices With New Subscription-Like Billing

Hired.com, which runs weekly auctions of developers for hire, is looking to challenge the way that traditional recruiting agencies charge their startup clients.

Technical recruiting in the Valley is often done by boutique agencies or headhunters with long rolodexes, histories and networks among local developers. Often, if they’re successful in getting a candidate, they’ll hand over a lump sum bill worth about 20 percent of a hire’s first-year salary.

But Hired.com, which started out as Developer Auction, is looking to change that. They’re introducing a payments model that resembles more of a subscription.

Instead of charging for new hires up-front, they’ll be charging 1 percent of a developer’s salary for the first 24 months of their employment. If the hire stops working for the startup, Hired.com will stop charging. If they stay longer than two years at their new employer, Hired.com will also stop charging after the 24th month.

It looks like a way for Hired.com to lock in their clientele over the long-run. Clients that are already paying Hired.com one or two thousand dollars a month might be more inclined to keep using the service if don’t get sticker shock.

“A company that’s adding 10 employees could be facing several hundred thousand dollars in recruiting fees,” said Matt Mickiewicz, who founded the company after starting crowd-sourced graphic design community 99Designs.

It will also help them expand their market reach out to companies that haven’t historically relied on recruiting agencies.

Hired runs weekly auctions with 50 to 60 developers each that are hand-selected by an in-house team for their technical skills and work histories. They started out last year to become a “transparent marketplace for recruitment,” where engineers could attract offers of interest from multiple startups instead of having to seek out each one by one.

With the imbalance of supply and demand for good engineers in markets like San Francisco and New York, the auctions took off. The company is profitable and now has 25 of its own employees, up more than threefold from six months ago. They place “dozens” of candidates every quarter and in one day, they even placed five hires. They recently raised $2.7 million from NEA, Sierra Ventures, Crosslink Capital, Google Ventures, Sherpa Ventures, Jeff Clavier’s SoftTech VC, and John Suliman’s Step Partners in March.

They’ve signed up hundreds of clients including Airbnb, Twitter and OpenTable and recently launched in New York, Boston, Los Angeles and Seattle.

They’ve also worked on the sticky issue of preventing current employers from knowing that their engineers are on the hunt for new work. They’ve filtered out current employers from seeing their own people on the site. Candidates are also on the site for only one week at a time, reducing the risk they’ll be seen by their current employer.

Dropbox Snatches Up Sold, The Service That Simplifies Selling Online, To Help It Build A New Mystery Commerce Product

Sold launched early this year with a plan to help remove some of the frustration from selling online.Debuting on the iPhone before moving to Android in September, Sold aimed to help busy people avoid the hassle of eBay and Craigslist and simplify e-commerce by taking the whole process out of their hands.

Today, just seven months removed from launch, the Sold team announced via its website that it has been acquired by Dropbox and will be closing its service as a result. Backed by $1.2 million from investors like Google Ventures, Greylock Partners, Matrix Partners and the team at Boston Seed, it’s a somewhat abrupt exit for a startup that appeared to be on the way up. In September, the team told TechCrunch that it had listed more than 2,000 unique products in its marketplace and was seeing 50 percent growth, month-over-month.

In turn, beyond the fact that Sold sought to add value by reducing the work inherent to selling online by pricing items, finding a buyer and arranging packaging, shipping and transactions for you, the startup also created pricing technology to help you get more for your items. Thanks to its algorithms that crawl top e-commerce marketplaces to build more accurate pricing rates and to allow customers to compare “going rates,” Sold said at the time that its prices were (on average) 43 percent higher, on average, than that of Gazelle.

As a result, after just four months, the startup was projecting $1 million in annual revenue and claimed to be growing fast. Nonetheless, the opportunity to join Dropbox ultimately proved to have more appeal for the founders than what they thought could be accomplished as an independent company. The deal, which Sold co-founder Tony DeVincenzi says came together in under four weeks, will see the startup’s nine full-time employees join Dropbox to form a new team within the company that will lead the design and development of “a new Dropbox product.”

Although the co-founders declined to elaborate on the plans for the new product, they did say via a post on their site that Dropbox’s “roadmap includes exciting new experiences which align perfectly with our ethos of creating products that positively affect people.” While that doesn’t say much, it is clear that the opportunity to reach Dropbox’s user base of 200 million played a hand in determining the outcome. That opportunity, they said, “was too good to pass up.”

Sold will be officially shutting down its product beginning today, and as of now, is no longer accepting new items. DeVincenzi says that the team is putting together a plan to help users finalize transactions and those who currently have items in the system have been contacted and will be dealt with on a case-by-case basis.

Considering that the launch of its Android app in September had allowed Sold to significantly speed up its streamlined e-commerce process — allowing users to move from first post to payment in four days — the abrupt end to its service will no doubt have some of its newest customers up in arms. But, depending on what the Sold team helps Dropbox produce in the coming months, maybe they won’t be without a mobile commerce platform for long.

Stay tuned for more.

Full announcement copied below:

Hi, friends! We’re very excited to announce that Sold has joined Dropbox! As of today, our service will no longer be accepting new items.

We’d like to sincerely thank all of our loyal friends and customers who have helped us, supported us, and spread the love for us through this amazing endeavor. We started Sold to provide people with a service that took the burden of selling off their shoulders – by doing all the dirty work for them.

But even beyond that, we wanted to create something that affected people in a positive way. Something they had an emotional connection with. Something they trusted. After spending time with Drew and Arash, we decided that the move to Dropbox couldn’t be better – their roadmap includes exciting new experiences which align perfectly with our ethos of creating products that positively affect people. Going forward, the Sold team will continue working together to build these experiences, shaping the future of Dropbox for their 200M strong user base. It’s an opportunity too good to pass up.

We’re really excited for the new set of challenges ahead, and are absolutely dedicated to continuing to create great experiences.

If you’re a current user with items in the system, expect to hear from us with instructions on how to proceed and finish your transaction.

Thank you, thank you, thank you,

-The Team at Sold

Lady Gaga Splits From Manager And Rising Tech Investor Troy Carter

Troy Carter has been making a name for himself in tech thanks to investments in Uber, Spotify, and Dropbox, but his biggest tie to the music industry has just been severed. Lady Gaga has split from Carter, who has managed her since 2007, according to multiple sources of The Hollywood Reporter Showbiz411. The separation could shake his status as he raises a new $75 million investment fund.

Carter is credited with masterminding some of Gaga’s success, including her massive social media audience. She has 60 million Facebook fans and is amongst the top figures on Twitter with 40 million followers. The gig gave Carter the clout and earnings to get into tech investing, and get invited tospeak on stage with me at TechCrunch Disrupt NY 2013. In this sense, no longer managing the artist is a serious hit to his profile.

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Lady Gaga Splits From Manager And Rising Tech Investor Troy Carter

On the other hand, splitting from Gaga could also free up more of Carter’s time to add value to his portfolio companies. The Hollywood Reporter says the split was chalked up to “creative differences”. A representative of Carter didn’t respond to requests for comment. However, one source close to the two music moguls tells me Carter may have become too busy for Lady Gaga in recent years.

On top of angel investing and funding startups through his venture capital fund AF Square, Carter runs the Atom Factorytalent management agency that represents John Legend, rapper K’Naan, and violinist Lindsey Sterling who won a YouTube Music Award last night. That’s a lot on one plate.

Regarding the split, The Hollywood Reporter…reports that “while sad, [Carter] feels ‘liberated’ to be relieved from duty.” With Lady Gaga’s new album ARTPOP coming out this month and her propensity for high-production tours, Carter’s duty would have been heavy this year.

Though Carter played coy when I pressed him about being a celebrity investor when we spoke at Disrupt New York, his footprint in tech has grown significantly in the last few years.

Between his reputation as a marketing virtuoso and his extensive rolodex, he’s become quite a prolific VC. Most recently, Carter set out to raise $75 million to $100 million for a new AF Square fund with a focus on brilliant founders.

Some of Carter’s latest investments include music playlist app Songza, celebrity fundraising platform Prizeo, and viral marketing serviceVirool. Now he may be able to better concentrate on providing his startups with product vision, business mentorship, and industry connections.

Google Launches Helpouts, Paid Video Chats With Experts To Address Whatever Is Bothering You Right Now

Helpouts, Google’s fusion of Google+ Hangouts, Google Wallet, and its identity tools is now live. A ‘Helpout’ is a Hangout-like video chat, but instead of speaking with a friend, you are connected to a purported expert in whatever it is that you need help with. The tagline that Google has come up with for Helpouts is “real help from real people in real time.”

Imagine a video chat session that you are paying for, that lasts for as little as a minute or two. You have an issue, say, what is this lump on my hand, or, how do I pull off a particular makeup trick, and have a quick chat with a person who can see what your problem is. And think broadly,

That’s the edge that Google thinks Helpouts has over every other content variety and service that helps you solve the situation you find yourself in. Today at its San Francisco offices, Google gave the media a look at the product, and proffered some hands-on time with its interface. The assembled tech press watched someone attempt to correct a drywall hole, apply lipstick in a particular way, and zest a lemon.

If you need a deep dive into the mechanics of Helpouts, TechCrunch helped break the story that Helpouts existed earlier this year. In this post, I want to dig into the economics of the offering, and its potential to succeed as a product.

Platform

Google is fond of calling Helpouts a platform and telling you that its team is separate from the Hangouts group. So, while the services share the core video experience, they should be thought of as distinct.

Helpouts uses your Google+ identity, Wallets payment features, and Hangout’s video technology to service its marketplace of providers. To seed Helpouts, Google has assembled a collection of just a little more than a thousand brands, Sephora for instance, and individuals so that people can dig in from day one.

Helpouts will need far more providers — diversity of offering here is key, naturally. Google has to demonstrate that its offering is better than what currently exists and that it is worth paying for. It must expand its database of on-demand information providers so that it can take nearly any request – if Helpouts doesn’t manage that, it will be niche, and therefore far too hit-and-miss to be compelling.

Google is working on an API for Helpouts, though it remains unclear to what end, and how developers will be able to better integrate the service into the lives of providers.

Everyone Else

If you are a regular Twitter user, you have probably by now become accustomed to asking your followers questions. It’s a fast, easy way to generate feedback about anything that you can think of. However, your followers are only so deep – unless you are a celebrity, of course – and you can’t pay them for help, so the relationship is quite different.

Would you pay $2 per minute to quickly speak with a cooking guru about your under-construction dinner? You can run Helpouts from your phone, of course, or regular computer. So, you would have a device in your kitchen that you could use. If the answer to that is no, Helpouts isn’t likely something that you’ll find too attractive.

On its face, having a cadre of brilliant people on demand about anything is attractive. It’s getting there that is hard.

YouTube how-tos. Yahoo Answers. Facebook friends. Real friend over the phone and text. These are free, and constitute Helpout’s competition. Google understands the power of free, and pointed out today that some Helpouts will be provided at no cost.

That is, if a specific provider decides as much. Why might you Helpout for free? Perhaps you want to help someone learn Spanish. Or the brand you work for wants a larger digital presence. There are a few options that are simple to imagine.

However, the theoretical magic of Helpouts involves money. That’s because the really good people – the best chefs, or what have you – don’t like working for free. So, you’ll get what you pay for

Who gets to charge for their advice? A fine question.

The Face In The Screen

Google approves every provider. Naturally, that won’t scale. The company either isn’t sure of what it will do next to handle quality of the providers that propagate Helpouts, or it didn’t want to tell the media. It isn’t clear.

Google has two needs that are in direct tension: Lots of providers and very good providers. There is always less supply of a superior good, period. Helpouts need a quickly expanding provider base – therapists! bankers! computer help! gardeners! – while keeping its quality up, which won’t be easy.

Will these people sit around, waiting for someone to book their time or ask for help in real-time? No. The company instead envisions that people who can Helpout will leave it on in the background of their computer, and have it alert them when they are needed. Providers can also receive SMS messages and the like when they are away from their desks. If you don’t hear back as a user in under five minutes, the session is free.

Will It Work?

Helpouts is not a small undertaking. Google wants you to be able to Google far outside of the search box. Helpouts as a service is a tacit admission by the company that its prized search algorithms can’t replace humans seeingyour problems. The information is different. And you can’t feed the real world completely into a search engine. Or not yet, at least.

Video chatting remains a buggy experience. Google Hangouts and Skype are both less-than-excellent solutions. This becomes even harder when on the go, without Wi-Fi, which represents I think a large chunk of the provider and user side of Helpouts. Your car doesn’t break down in your living room, so when you need someone to talk you through your tire repair in the rain, your video bitrate won’t be too impressive.

I’m skeptical of Helpouts because it has so many moving parts, between moving people, looking for quick interactions. I don’t want you to tell me in five minutes if I burned the sauce. If I need a real-time answer, it has to work every time or I won’t come back.

Google has to find endless brilliant people to be providers, and keep their link strong enough to the service to be constantly available. You can book sessions, of course, at a price discount, but that’s different. A real Helpout is now, instantly, and based on video communication. You are never going to stand on a ladder and wait for someone to take their time to pop onto your phone to explain to you why you can’t roof worth a damn.

The Helpouts experiment is something of a question. Has Google perfected the experience to the point in which people will start paying for micro-video sessions? My gut says no.

The other side of that is simply that if Helpouts does work, it will be an incredible asset to life. And Google as a company is known for its brilliance, and not ignorance. But even the smartest companies can’t make everything work.

Finally, by allowing consumers to purchase less expert time at a time, say just 4 minutes as opposed to an hour-long session, Google could be limiting provider revenue by selling a more efficient system. That’s great for consumers, but could irk providers, if they see their ability to overcharge for a service that they could in the past shrink.

Tomorrow

Even if Helpouts doesn’t catch on, it is enjoyable to see Google assemble a new product out of its extant service line up. And, as we said, Google is not making small moves. But whatever happens in the end, we can still Google things. And so far that’s worked out pretty well.

IBM Claims Twitter Infringes On At Least 3 Of Its Patents, According To Twitter’s Latest S-1 Update

As Twitter embarks on its initial public offering roadshow, the company has issued another update to its S-1today with a curveball. IBM has recently issued a letter to Twitter alleging that it infringes on “at least three U.S. patents” held by IBM, “inviting us to negotiate a business resolution of the allegations.” The disclosure comes at the same time that Twitter has also raised its IPO estimate to $23-25 per share, up from the previous $17-20 — a sign of Twitter’s confidence that despite details like the IBM note, it’s expecting a strong turnout when it lists.

The S-1 filing appears to indicate that although IBM is seeking a settlement over the alleged infringement, it looks like Twitter is ready to defend itself. “We believe we have meritorious defenses to IBM’s allegations, although there can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us,” the company writes.

The specific patents in question are U.S. Patent No. 6,957,224: Efficient retrieval of uniform resource locators; U.S. Patent No. 7,072,849: Method for presenting advertising in an interactive service; and U.S. Patent No. 7,099,862: Programmatic discovery of common contacts.

The note appears in an update to the S-1 that offers extended caveats on how patents, copyrights, trademarks and trade secrets are frequently the subject of litigation. Twitter admits that it’s not a strong player in this area.

“Many companies in these industries, including many of our competitors, have substantially larger patent and intellectual property portfolios than we do, which could make us a target for litigation as we may not be able to assert counterclaims against parties that sue us for patent, or other intellectual property infringement,” it writes, with a special flag for trolls: “In addition, various ‘non-practicing entities’ that own patents and other intellectual property rights often attempt to aggressively assert claims in order to extract value from technology companies.”

Although Twitter has shown itself up to now to be a very developer-friendly player in the patent space, it is salvos like IBM’s that may prove to test that resolve, especially as Twitter continues to evolve its service and move into new areas — a point it also makes, adding that right now it’s also potentially liable for claims against its partners and customers, too.

“From time to time we may introduce new products and services, including in areas where we currently do not have an offering, which could increase our exposure to patent and other intellectual property claims from competitors and non-practicing entities,” it writes. “In addition, although our standard terms and conditions for our Promoted Products and public APIs do not provide advertisers and platform partners with indemnification for intellectual property claims against them, some of our agreements with advertisers, platform partners and data partners require us to indemnify them for certain intellectual property claims against them, which could require us to incur considerable costs in defending such claims, and may require us to pay significant damages in the event of an adverse ruling.”

Twitter’s patent disclosures in the S-1 come at a time when the company is rolling out new services around its platform — many of which are effectivelydata-driven live tests to see what gets people to engage more on the site. The company is also reportedly looking at how it might do more with core products like direct messaging. Given that a large part of its business and audience is already on mobile, this, too, could take the company further into new product areas.

It’s unclear whether IBM would ever take this kind of allegation all the way to filing a suit, or whether it is putting it out there right now in hopes of a sweetheart deal that involves shares in Twitter. IBM is one of the world’s biggest tech patent owners (although recently slipping to No. 2 in mobile after Samsung), and has in the past sold troves of patents to the likes of Facebook, a sign of how social media companies are not immune to the patent race that has largely been the terrain of the mobile industry in recent times.

The Three Reasons Twitter Didn’t Sell To Facebook

Facebook’s Mark Zuckerberg tried to acquire Twitter not once but twice, through official channels and via co-founder Jack Dorsey. The details of the efforts are revealed in Nick Bilton’s new book Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal.

I’ll have a full review of the book soon, but I found one passage in particular worth noting. It was late October of 2008, shortly after Dorsey had been ousted as CEO and consigned to a silent role as Chairman, with no voting stock or operational control. Fellow Twitter co-founders Ev Williams and Biz Stone had been invited to visit Facebook for a sit-down with CEO Mark Zuckerberg. The purpose? An acquisition of Twitter.

Zuckerberg, Bilton explains, had been working Dorsey for months to try to arrange a buyout. But his plans were thrown into disarray when Dorsey was yanked from the CEO slot. An email at one point to Jack had given a point-by-point reasoning on why Facebook+Twitter made sense. Among those reasons was the customary threat that Facebook could choose to ‘build products that moved further in [Twitter's] direction’, a tactic that we’ve personally heard many accounts of Zuckerberg employing. The implicit threat: sell to us or we’ll clone your product.

During the meeting, Williams and Stone threw out a valuation: $500 million. Zuckerberg was not shocked, as Dorsey had already informed him that this was the range that would be sought.

But the sale didn’t happen, and the reasoning behind the rejection was outlined in an email by Williams to the board, which is partially quoted in Bilton’s book.

It seems to me, there are three reasons to sell a company, Ev wrote in an e-mail to the board outlining why they should decline Facebook’s offer. 1. The price is good enough of or a value that the company will be in the future. (“We’ve often said that Twitter is a billion dollar company. I think it’s many, many times that,” Ev wrote.) 2. There’s an imminent and very real threat from a competitor. (Nothing is going to “pose a credible threat of taking Twitter to zero.” 3. You have a choice to go and work for someone great. (“I don’t use [Facebook]. And I havemany concerns about their people and how they do business.”)

There are a few interesting points in this passage, which we’ve emphasized. First among those is that the board saw Twitter as a billion-dollar company in 2008, and Williams saw it as many times that. In 2008, Twitter had fewer than 11 million users, and had yet to see the exponential gains that would come in early 2009 as a result of publicity like Ashton Kutcher’s public race against CNN to be the first million-follower account. Twitter’s current IPO filing places a roughly $11.9 billion value on the company. Even with a crappy infrastructure still wobbling under the weight of the users it did have, Twitter’s leadership had faith.

That faith extended to the fact that there was no competitor, including Facebook, who could pose a ‘credible threat of taking Twitter to zero’. The concept of Twitter, and its execution, was so unique that even a company with Facebook’s resources was ill-equipped to mimic its behavior and success. This is reinforced by another anecdote in the book about a possible $12 million Yahoo acquisition, which was politely declined very early on in Twitter’s life. The number, even with only 250k active users of what was still an Odeo side project, seemed so low to Biz, Williams and Dorsey that it became a running joke.

And lastly, Williams was also uncomfortable about a culture mis-match. The book as a whole drills down deeply into some very flawed, very human characters. But a strain that runs throughout is that the core creators of Twitter were all looking for ways to democratize human connections. That started with Odeo and continued through to the Twitter experiment. Williams felt that Twitter could be negatively impacted by intermingling with Facebook’s company culture, and was willing to bet hundreds of millions of dollars that it would be better without that influence.

We seem to talk more and more about the mercenary nature of Silicon Valley — and the popularity of ‘acquisition as business plan’ — daily. But, it turns out, there are still people making decisions based on something other than the seven deadly sins.

And one can’t discount the impact that lightly veiled threats have on negotiations. They can often lead to a sour taste, and we’ve heard about more than one negotiation with Facebook that has been spoiled by this kind of hint-dropping. Facebook took roughly three years to clone Twitter’s core ‘follow’ feature, launching Subscribe in 2011. It was later re-named ‘Follow’.

Dorsey, for his part, was ambivalent about a Facebook acquisition, saying that “If the numbers are right, there’s a success story in either path.” At the time, he was fresh off of his removal as CEO, with little hope of getting any real power in the company back. That turned out to be wrong, thanks to friendly investor Peter Fenton, but it’s not too surprising that he saw the money as a fair trade.

But the board agreed with Williams’ reasoning and declined the offer. Zuckerberg would then go on to court Dorsey heavily, but refuse to give him a head of product position. Dorsey never went to Facebook, and when Twitter IPOs, he’ll get his voting shares back.

An interesting note: Williams actually blogged about the offer, and the three reasons, earlier this year but never disclosed that it was Facebook. An interesting quote from the piece:

At the time, the offer we had on the table for Twitter—though a heck of a lot of money and a huge win for investors and anyone else involved—didn’t seem like it captured the upside. Even though we weren’t huge, and there were still a lot of doubters, I believed our potential was unbounded.

…

In the Twitter case, we had no desire to sell. I had actually just become CEO and was raring to go—as was the team. Additionally, the company we were having the discussion with didn’t seem like one in which we’d fit particularly well or the team would be stoked about.

The passage presents us with an intriguing alternate reality where Facebook acquired Twitter, establishing an essential monopoly on the world’s largest and most recognizable social networks. And an example of how it’s still possible to mesh the concepts of business acumen and moral code.