Billion-dollar-plus price tag? Check!

Yes, all of that describes the Yahoo-Tumblr deal. And it also describes Google’s move to buy YouTube in the fall of 2006.

Which doesn’t mean the two deals are parallel, of course. For starters, the $1.6 billion Google spent on YouTube was a drop in the bucket for the search engine. But $1.1 billion is spending is a very big chunk of Yahoo’s cash pile.

And even back in 2006, it was clear that video would be a crucial part of the Web. You can’t use the same certainty when you talk about cat GIFs.

More important is that then and now, Google viewed YouTube as a nice compliment to its core business, which has never flagged. For Marissa Mayer, it’s a crucial part of her strategy to bring new eyeballs to a faded brand.

Still! Fun to compare and contrast.

Here’s what we know about Tumblr: It’s seven years old, has a lot of users, and last year it lost money on $13 million in revenue. And for YouTube: It turns 8 tomorrow, is reportedly on track to generated $4 billion in revenue this year*, and Google executives keep murmuring that it either is or could be profitable.

More interesting for today: Here’s what YouTube’s financials looked like for a two-year period ending August 2006 — shortly before Google bought it (the document comes courtesy of the never-ending Viacom-YouTube copyright fight). Note the sharp uptick in revenue, users and costs at the end. Perhaps Yahoo saw something similar.

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*As with all YouTube revenue estimates, take Morgan Stanley’s most recent one with a big chunk of salt.

The Yahoo board has approved a massive $1.1 billion all-cash deal to buy Tumblr.

Sources close to the board said the deal was a foregone conclusion and was an unanimous vote by the Silicon Valley Internet giant.

The deal will be announced Monday morning, said numerous sources.

AllThingsD.com initially broke the story of the acquisition efforts and later followed up with details of the price and the board meeting that took place today.

There were no other competing bids, despite reports, to snap up the New York-based blogging service.

As part of the deal, Tumblr CEO David Karp — who got a windfall of cash from the deal — will stay at Yahoo for four years at least and retain a lot of control over the service, much in the same way Instagram CEO Kevin Systrom does at Facebook. But, as there, Yahoo will undergird Tumblr’s nascent advertising business with its large and established infrastructure.

Yahoo had been mulling some kind of deal with Tumblr, from a strategic investment to an outright acquisition, for about six weeks. Sources said that Yahoo CEO Marissa Mayer had decided that buying the company was going to be “the stake in the ground of what her strategy is going forward for Yahoo.”

And that is to attract younger audiences with just the kind of user-generated content Tumblr has pioneered to huge growth.

According to numerous sources, Mayer determined quickly in her research that the fast-growing content site, turbocharged by mountains of user-generated content, was just the kind of property that Yahoo needed to make it both “cool” and relevant to new audiences.

Yahoo is looking to undergird its strong set of existing media offerings to appeal to a different audience and also get into the social space via consumer-based software solutions that are both elegant and easy to use.

Tumblr’s mobile usage has also been strong, which also interested Mayer. While Tumblr started as a desktop-based service, its mobile usage has ramped up quickly in the last few years. ComScore says that a quarter of the service’s U.S. visitors now come from mobile devices.

At this price, it will be Mayer’s biggest acquisition so far. Since she became CEO last summer, Mayer has made only a series of small acquisitions of mobile startups.

Presumably, the Tumblr brand will continue.

The deal, if consummated will be a big win for investors. In a series of fundings since 2007, Tumblr has raised $125 million so far and is now at a reported valuation of $800 million. Investors include Spark Capital, Union Square Ventures, Sequoia Capital, Greylock Partners, Insight Venture Partners and the Chernin Group.

While Tumblr’s Karp has resisted various offers for the company over the years, Mayer spent a lot of time with him reassuring him of how Yahoo could turbocharge his business. He has also been searching for a COO to help him build out the infrastructure of its business, especially its advertising one.

And as Peter Kafka and I previously wrote, Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.

But figuring out how to make money from that audience is a task that the company has only recently started to tackle.

Like other recent Web startups that have seen rocket ship growth — see: Twitter, Facebook — Tumblr resisted advertising for its formative years, and its user base seems particularly unwilling to accept standard banner ads. In addition, many industry observers think that Tumblr’s pages are packed with porn and/or other questionable content that would scare off advertisers.

But within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages, on users’ “dashboards,” which has shown promise. Tumblr has said it had $13 million in revenue last year and sources said it could get to up to $100 million this year.

Tumblr has been represented by Qatalyst Partners’ Frank Quattrone, while Yahoo’s Mayer, as well as M&A head Jackie Reses and CFO Ken Goldman has been on the company’s side.

Interestingly, what got me first focused on Tumblr last week was Goldman’s comments at JP Morgan’s Global Technology conference last week, where he underscored the need for the aging Silicon Valley Internet giant to attract more users from the coveted 18-to-24-years-old age bracket. Along with more marketing, he explicitly said Yahoo needed to be “cool again.”

“One of our challenges is we have had an aging demographic,” said Goldman at the Boston event. “Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.”

Tumblr, apparently, fits the very expensive bill.

How much porn? You’ll have to make something up, because the only people who know how much porn the blogging service hosts work at the blogging service, and they don’t offer up a number.

But let’s stipulate, for argument’s sake, that there is indeed a lot of porn on Tumblr — in fact, the company’s terms of service make a point of saying it’s okay with “not suitable for work” stuff.

Which means there are a lot of pages on Tumblr that advertisers won’t go near. Like “Girls in Yoga Pants“, where the image at the top of this post came from (yes, that’s a tame one).

So why isn’t that an issue for Yahoo, which is very close to spending $1.1 billion on the company?

Here it’s important to pay attention to the way Tumblr actually works — or more precisely, the two ways it works.

Tumblr offers tools to make simple blog pages, which anyone with a Web browser can see. So you don’t have to sign up for Tumblr to check out We Want Porn, but comScore will count you as one of the service’s 117 million monthly users.

Tumblr’s core users, though, log in to the service, and subscribe to different Tumblogs, which they view on a “dashboard” — the equivalent of Twitter and Facebook’s newsfeeds.

Not coincidentally, these are also the only people that Tumblr is showing ads to, either via “radar” ads that promote Tumblr pages alongside users’ dashboards, or “spotlight” ads that promote Tumblr pages in a directory of suggested accounts.

To spell that out: Tumblr’s advertisers don’t have to worry about their stuff showing up on blogs like We Want Porn. At worst, it’s possible that they’ll end up advertising to a user whose dashboard includes posts from We Want Porn. But in general, they ought to be pretty well insulated from that stuff.

By the same token, if Yahoo wanted to, it could end up scrubbing Tumblr of porn, and losing a lot of users and views — but it probably wouldn’t lose much in the way of monetizable users. Unless it turns out that the majority of Tumblr’s core users have signed on exclusively to use porn.

So: Problem? Sure. But it doesn’t look like a costly one.

UPDATE: Now that the deal is done, a Tumblr backer has piped up to offer a more concise version of my argument: “Non-story. Tumblr is the Internet. It’s a dashboard follower model, opt-in.” That would have saved me a bunch of typing!

mama_mia/Shutterstock

Today marks a year since Facebook’s rough-and-tumble IPO.

Since that disappointing day, Facebook has gone to great lengths to assure Wall Street that yes, it will one day be the social ad spinning, money-making machine that Wall Street hopes it will be.

The biggest potential, Facebook maintains, lies in what executives consider “long-term investments,” products with grand ambitions to change the way we interact with Facebook — if not the world — on a regular basis.

Therein lies the problem. Meaningful change won’t happen soon.

Consider Facebook Home, the mobile project years in the making that aims to shift the way we interact with our mobile devices, anchoring users within the Facebook experience. The potential for success with Home, if widely adopted, could be big. More time spent inside of Facebook’s products means more ads served by default — especially when Facebook finally brings ads to Cover Feed, one of the key features of Home.

And yet by many measures, Home has stumbled hard directly out of the gate. More than half of its user reviews on Google Play are scathing. And as of last week, just over one million people had installed the product, a trifling amount compared to the 1.1 billion users on Facebook’s network.

What Facebook really wants from Home is to catch on overseas. Create a mobile-focused product to capture developing world markets — where the phone is a person’s primary computing device — and you’ve got potential to spur growth. Home, however, runs only on certain higher-end Android devices, hardware that won’t be ubiquitous or cheap in developing countries for at least a few years.

Home isn’t the only long-term bet. Look at Graph Search, Facebook’s search product rolled out earlier this year. Almost immediately came calls saying “watch out Google!” from the public. Perhaps Google’s stranglehold on the search market could be upset by a social form of discovery.

But Graph Search is possibly in an even more nascent phase than Facebook Home; Graph Search has only been rolled out to a select amount of users, and Facebook has oodles of work to do if it wants to curb the way people make Web search queries and focus them on people, places and things inside of the Facebook network.

Granted, Facebook has made serious moves in the past year to spur profitability further, releasing a slew of new ad products, revamping its gaming platform partner ecosystem and pushing, however slowly, into online retail with Facebook Gifts. It has consistently hit its numbers in the company’s quarterly earnings calls. And as the Wall Street Journal’s Evelyn Rusli wrote, the company made significant internal shifts over the past yearthat have made more teams responsible for Facebook’s revenue.

Yet still, the needle hardly moves on Facebook’s stock ticker; it closed at around $26 per share on Friday, well below the $38 it opened at one year ago. For all of Facebook’s long-term posturing, the Street remains cautious.

“We don’t build services to make money,” CEO Mark Zuckerberg wrote in his company’s S-1 prospectus before Facebook’s Nasdaq debut. “We make money to build better services.”

Hopefully, for the sake of the shareholders, Facebook can do both.

In case you missed anything, here’s a quick roundup of the news that powered AllThingsD this week:

1. As AllThingsD‘s Kara Swisher and Peter Kafka were first to report this week, Yahoo is seriously thinking about buying hipster blogging service Tumblr. In fact, Yahoo’s board is scheduled to consider a $1.1 billion all-cash deal on Sunday.
2. Google wanted to dominate the headlines this week during the company’s annual I/O conference … just maybe not like this. By sending Microsoft a cease-and-desist, they helped promote that rival’s anti-Google campaign.
3. That little drama didn’t come up during the official proceedings of I/O, but a lot else did. Here’s a rundown of all the news Google announced in its three-and-a-half-hour opening keynote.
4. Watch this: An interview with Bill Gates, in which the Microsoft founder talks about his longtime relationship with Steve Jobs, on “60 Minutes.”
5. Can productivity apps for the iPad make it as useful as a traditional work PC? Walt Mossberg puts them to the test.
6. Speaking of the iPad, the Justice Department is closing in on Apple with an e-book price fixing case … but one of the seemingly most damning pieces of evidence, a line from a letter from Steve Jobs to James Murdoch, is a little less damning in context.
7. Web video services like Amazon, HBO and Hulu all say they’re seeing significant growth. But is anyone cutting into Netflix’s lead? A new report says: Nope!
8. BlackBerry is bringing its messenger application, BBM, to iPhones and Android phones this summer. But is it too late?
9. Cisco’s earnings only barely beat analysts’ expectations this week, but that beat sent the company’s stock up 9 percent in after-hours trading. Arik Hesseldahl got CEO John Chambers on the phone to talk about where Cisco is and where it’s going.
10. And lastly, if you want more battery life out of your iPhone on the go, you may have considered a special re-juicing case. Product reviewer Lauren Goode tries the battery boosters before you buy.

To stay on top of the latest, follow AllThingsD on Twitter and Facebook, and subscribe to our daily email newsletter.

Samsung Electronics co-CEO Shin Jong-kyun said at an industry forum in Seoul this week that S4 shipments will top 10 million in a few days. This, less than a month after the device’s debut in some 60 countries.

“We are confident that we will pass more than 10 million sales of the S4 next week,” Shin said, according to the Korea Times. “It is selling much faster than the previous model S3.”

Great news for Samsung, but news that comes with an important caveat: The company here isn’t talking about retail sales to consumers, but sales to carriers. Reached for comment, Samsung confirmed to AllThingsD that Shin was indeed referring to shipments into the channel when he offered that 10 million unit number.

Ten million handsets shipped into the channel in such a short time is still a hell of a milestone. But there’s a big difference between that and consumer sales of 10 million. The S4 may well be selling much faster than its predecessor, but not so much faster that there will be 10 million units in consumer hands next week. Some will still be sitting on carrier shelves awaiting purchase.

It’s worth noting that Samsung is not alone in reporting smartphone “sales” this way. Many companies do — including Apple. When the company posts quarterly earnings, it reports iPhone “sell in” numbers — numbers that include products it has shipped to retail partners like AT&T, Best Buy and Walmart, but not necessarily sold to end consumers. From Apple’s latest earnings statement:

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit.

Now, Apple has some 400 retail stores worldwide, and they — along with the company’s Web sites — sell a lot of iPhones directly into the hands of consumers. But they didn’t do that for every one of the 37.4 million the company sold in its recent quarter. Indeed, during Apple’s last earnings call the company said it had 11.6 million iPhones in channel inventory during the period.

Those were devices “shipped” to retail partners. But for Apple’s purposes, they were “sold.” Same story for Samsung.

According to sources close to the situation, the Yahoo board plans to meet Sunday to decide whether to approve a $1.1 billion all-cash offer for New York-based blogging site Tumblr.

As AllThingsD.com first reported yesterday, Yahoo has been mulling some kind of deal with the hip New York-based blogging site, from a strategic investment to an outright acquisition. Sources said that the Silicon Valley Internet giant’s CEO Marissa Mayer has decided that buying Tumblr was going to be “the stake in the ground of what her strategy is going forward for Yahoo.”

And that is to attract younger audiences with just the kind of user-generated content Tumblr has pioneered to huge growth.

As with all big-time acquisition deals, this one could certainly fall apart at the last minute, but source said the agreement was still in place as of today. If approved by Yahoo’s board, it will be announced Monday. Yahoo has already said it has news to announce then.

According to numerous sources, Mayer started an intense focus on Tumblr about six weeks ago and determined quickly that the fast-growing content site, turbocharged by mountains of user-generated content, was just the kind of property that Yahoo needed to make it both “cool” and relevant to new audiences.

Yahoo is looking to undergird its strong set of existing media offerings to appeal to a different audience and also get into the social space via consumer-based software solutions that are both elegant and easy to use.

Tumblr’s mobile usage has also been strong, which also interested Mayer. While Tumblr started as a desktop-based service, its mobile usage has ramped up quickly in the last few years. ComScore says that a quarter of the service’s U.S. visitors now come from mobile devices.

At this price, it will be Mayer’s biggest acquisition so far. Since she became CEO last summer, Mayer has made only a series of small acquisitions of mobile startups.

Sources said that as part of the deal, founder and CEO David Karp would continue to operate the business, with Mayer promising him a level of autonomy, despite the need to integrate closely with Yahoo too. He will be locked in, sources said, via a four-year deal that will reward him for performance of the business.

Presumably, the Tumblr brand will continue.

The deal, if consummated will be a big win for investors. In a series of fundings since 2007, Tumblr has raised $125 million so far and is now at a reported valuation of $800 million. Investors include Spark Capital, Union Square Ventures, Sequoia Capital, Greylock Partners, Insight Venture Partners and the Chernin Group.

While Tumblr’s Karp has resisted various offers for the company over the years, Mayer spent a lot of time with him reassuring him of how Yahoo could turbocharge his business. He has also been searching for a COO to help him build out the infrastructure of its business, especially its advertising one.

And as Peter Kafka and I previously wrote, Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.

But figuring out how to make money from that audience is a task that the company has only recently started to tackle.

Like other recent Web startups that have seen rocket ship growth — see: Twitter, Facebook — Tumblr resisted advertising for its formative years, and its user base seems particularly unwilling to accept standard banner ads. In addition, many industry observers think that Tumblr’s pages are packed with porn and/or other questionable content that would scare off advertisers.

But within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages, on users’ “dashboards,” which has shown promise. Tumblr has said it had $13 million in revenue last year and sources said it could get to up to $100 million this year.

Tumblr has been represented by Qatalyst Partners’ Frank Quattrone, while Yahoo’s Mayer, as well as M&A head Jackie Reses and CFO Ken Goldman has been on the company’s side.

More to come, obviously.

Karp’s interviewer is Howard Lindzon, who’s now known as the guy behind StockTwits. Assuming that the interview was taped close to the time it was published, it would have meant that the two men were talking as Karp was raising his first funding round of $750,000, led by Union Square Ventures and Spark Capital.

No need to say anything else:

And Animoca couldn’t be happier about that.

Co-founder Yat Siu calls them “fast food apps.” His 150-person company, a conglomerate of 12 smaller studios, has developed and published more than 350 apps, he said, currently at the rate of about four every week. Its goal is to one day crank out a new app every day as it expands its reach further into Asia and beyond.

Siu, who is also the CEO of Animoca’s parent company, Outblaze Ventures, said as much in a recent interview with AllThingsD. But he also had a lot more to say about the advantages of working outside of Silicon Valley, the maturation of Google’s Android ecosystem and why quantity is sometimes better than quality.

AllThingsD: What’s the difference between being based in Hong Kong and being based in Silicon Valley?

Yat Siu: In terms of our [Android] ecosystem, it is the dominant marketplace, whereas in the Valley, there’s a lot of focus on Apple. We don’t have that much venture capital available to us, so we have to focus on profitability and the bottom line very, very quickly. Our games aren’t all profitable, but our business is. And we’re just a small island city, so we do not have a domestic market. It’s go global or die.

How do your games fare in different regions?

When we first started [in 2011], the U.S. was our biggest market, but just because it had a larger ecosystem. That’s changing today. North America as a continent is now in second place to Asia because Japan and Korea are driving a lot of the revenues. … The people who are buying iPhones or Android phones in the U.S. today are not the first movers, whereas in Asia, a lot of the marketplace still has way under 50 percent smartphone penetration rates. In Japan, at the start of this year, it was under 30 percent.

Is Android fragmentation a problem for you? Putting most of your eggs in that basket means you’re dealing with phones that range from the very low end to the very high end, right?

Two years ago, we had a testing rack of 600 devices. Now, Samsung is outselling basically everyone else, except in China and Japan. The second thing that’s different now is that “low end” is no longer really “low end.” You used to have really poor devices with poor resolution and processing power. Even the so-called “cheap” devices that are sold in China today are quad-core or dual-core devices; they just cost $100, is all. And they’re all standardizing around Jelly Bean (the most recent version of the Android OS). The whole Android philosophy was, “Here, take the operating system. Do what you want. Good luck!” We had weird memory issues because people would be coding stuff on top. Now, with Jelly Bean, most of the stuff that’s going on in the operating system is going on in the application side.

Pretty Pet Salon is one of the more popular games Animoca has published, and started a “Pretty Pet” franchise.

Tell me about your games and how they perform. How do you evaluate success?

We look at every product as a gateway to another product. The key driver is popularity. Monetization will come, we think, once people are in there, but the ability to cross-promote to other games becomes important. We want to make sure that the user always has at least a few of our games to play, because we don’t believe that there is such a thing as a person who can play a game for years and years and years. It’s “fast-food apps.” People just want to consume quickly, move quickly and go on to the next thing. It doesn’t mean that they won’t come back to it, but they’re not prepared to invest console-style, sitting down and playing for four hours.

And if you spent $60 on a game, you’re probably going to invest a lot more time than if you spent nothing or spent 99 cents.

That’s true, too, definitely. But also, with mobile, whether it’s in trains or one-handed game time, sometimes it’s just when you’re lying in bed, the behavior that we’re seeing now is that a person is playing a game, and then after five minutes, he wants to move on to another game. He’s not necessarily playing the same game for an hour. He’s like, “I feel like something else.” It’s no different than people switching TV channels every once in a while, except they’re switching games.

So it’s not as much of a “hits-driven” business for you as it might be for others?

It’s all relative. What is a hit? Because it’s a global audience, a niche segment is pretty large. And yet, if you have a five-million-user niche, is that a hit? It’s probably a hit for an indie studio, but it’s not a hit for us because of the scale we operate in. Typically, we call anything a hit if it has over 15 million downloads, but as a franchise, as a series. We might have one app, and then if it does well and has a few million downloads and reasonable revenues, then we put sequels and additions on top of it. Out of the series, we may wind up having something like 20 or 25 apps.

For those games that aren’t sequels to existing games, how do your studios come up with new things to publish?

We have studios that are as small as six people. The producer is empowered to have his own budget and his own creative vision. There’s a weekly meeting where all the producers come together and talk about what they’re doing, and then go off and do their own thing. The advantage for the business is, if you start off with a studio of six people and it bombs, who cares? It’s not great for them, but the business can afford to do it. If they do well, they have a platform.

The independence of our studio is also attractive to our staff. They have the chance to be a startup without the startup risk. They don’t have to worry about payroll or finance, they can focus on the product and build their own team. The additional unintended advantage is that, in Hong Kong, we’re unique. So, if you want to do games and you want to publish your games, then, frankly, there’s nowhere else to go. People come to us because the other option is banking or finance — which is a good career, just not if you don’t like it. If we were in the Valley, we might end up getting slaughtered by the amount of recruitment and loss of staff. Who knows?

But it’s worth noting that you do also maintain an office here in San Francisco for non-game development roles like partnerships and PR.

In the past, the meccas of the global gaming space used to be different. They used to be Sony, Nintendo and, at one point, Sega. But it was never centered around Silicon Valley. That changed with the smartphone. Now the new mecca is the Bay Area, because Google Play is here and Apple is here. We have an office here because we have to pay homage to the new temples. Even though we’re not in the Valley, it’s absolutely required for us to go in. Every other app company that’s international that wants to succeed must do the same.

Almost all of your revenue, about 95 percent, comes from in-app purchases. Are you looking at other business models?

Advertising will come, but it is not dominant yet. Primarily, the buyers for that now are other app companies, and we’ve got our own network. If we focus more on our cross-promotion, we get more out of that than necessarily opening up inventory to everyone else. Right now, ads are generally low-quality, and they’re also spammy, so it’s a bad user experience. But that will change. The experience is there already — think about how much time you’re spending on mobile versus PC — but [ads] have to deliver value to the user. Facebook has the right idea. People who like casual games, you should really only show them other casual games. Today, the targeting doesn’t exist.

What does your conversion rate of non-paying to paying players look like? The typical curve has a lot of people at the bottom paying nothing or almost nothing, then a long tail with a bump at the end, composed of a small number of players who pay a lot.

That is the hardcore type of model, where basically you have a very low conversion rate, something like 2 percent, and a very high consumable model where people can spend thousands of dollars. That’s not our model. If you look at games like Pretty Pet Salon, you’d be hard pressed to spend more than 20 bucks, just because of the game play. We are expecting to have more volume of titles with a larger frequency of players coming in from outside. So, for instance, Pretty Pet Salon has an 8 percent conversion rate. Now, when we start working with Forgame (Animoca recently accepted a “strategic minority investment” from the Chinese hard-core game maker), that is different. We will listen to their suggestions, and it does appear that that will be the strategy, because people are prepared to spend that kind of money. It’ll be a learning experience for us.

In announcement issued Friday morning, the agency said it has granted iOS devices running iOS 6 FIPS 140-2 certification and STIG approval, granting them the same security clearances it issued to BlackBerry and Samsung last week. A crucial endorsement, and one that should open the door to lucrative contracts from customers in highly regulated industries like healthcare and finance.

Certainly, Apple views it that way and used DOD’s announcement to plug the inroads its iOS devices have been making in enterprise lately.

“With iPhone and iPad being tested or deployed in almost every Fortune 500 company, Apple continues to scale across enterprise with nearly 30,000 companies globally developing and distributing iOS apps for corporate use by their employees,” Apple spokeswoman Trudy Muller told AllThingsD. “The FIPS 140-2 certification and STIG approval demonstrate our ongoing commitment to deliver a secure platform to our enterprise and government customers around the world who deploy iOS devices on their networks.”

But if you want to make the “pro” case for the deal, here’s how to do it: Pretend that Yahoo is Facebook, and Tumblr is Instagram.

The Facebook/Instagram deal is just over a year old, which means it’s still pretty early to gauge it. But so far it seems to have worked perfectly.

Facebook promised that Instagram would operate autonomously after the acquisition, and from the outside it appears to have kept that promise. People who read sites like this know that the two companies are linked, but lots of other people don’t, which is a huge plus for Instagram. (See: Parents who won’t let their kids use Facebook, but are okay with Instagram. For giggles, tell them the two are owned by the same company, and watch their faces turn ashen.)

And we’ve yet to see Instagram clutter up with lots of ads — or any ads at all. Result: The app is still growing like a weed, which helps mollify critics who worry about Facebook’s inevitable slowdown.

So that sounds like a pretty good model, right? Can Yahoo do the same thing with Tumblr?

Maybe. Tumblr is a much more mature company than Instagram, with a much bigger infrastucture. Kevin Systrom had about a dozen employees when he sold his company. After keeping his staff super lean for many years, David Karp has been on a hiring spree, and Tumblr’s head count is on track to hit something like 200 this year, with its own sales staff. So it will be harder to just tuck that away in the Yahoo org chart.

The crucial difference between the two scenarios, though, has less to do with the seller than the buyer.

Facebook bought Instagram because Mark Zuckerberg wanted to remove an obstacle. If Marissa Mayer buys Tumblr, it’s because she’ll be looking for a boost.

That makes it much less likely that she’ll be able to resist leaving Tumblr alone, and letting it figure out how to sell ads. Zuckerberg can drop a billion (or so) on Instagram, leave it unmonetized for a year, and Wall Street shrugs. Hard to imagine investors reacting the same way to this one.

Research outfit Raymond James says that the debut of BlackBerry’s new BlackBerry 10 operating system and the two handsets on which it runs have gone a long way toward repairing the home-turf market share erosion the company has suffered over the past few years. In the fourth quarter of 2012, BlackBerry’s share of the Canadian market topped out at a dismal 6 percent. But by the first quarter of 2013 it had more than doubled, rising to 13.5 percent.

The reason? The BlackBerry Z10, the company’s new all-touch handset — one that finally gave it table stakes at the smartphone game from which Google and Apple had ousted it. The Z10 had a strong Canadian launch, according to BlackBerry, which said the device’s debut was more than 50 percent better than any other launch day in its history in the country. Evidently the device has retained enough of that early momentum to drive continued market-share gains.

And now, with BlackBerry’s second BB10 handset — the Qwerty-keyboard Q10 — recently introduced in Canada, the country’s largest technology company may be poised to reclaim even more ground in its homeland.

“I think the Q10 will see much better demand than the Z10, as I have to believe the primary reason users are still on BlackBerry is for the physical keyboard,” Raymond James analyst Tavis McCourt told AllThingsD. “That being said, a lot of that demand may get stretched out over a few quarters, as it will take time for enterprises to adopt BlackBerry Enterprise Service 10, which is needed to support the Q10.”

Make no mistake, these days Canada is more an iPhone nation than anything else — Apple’s smartphone claimed 40.1 percent of the market in the first quarter of 2013. But that’s down from the 44 percent share it captured in the fourth quarter of 2012. If that trend continues, maybe BlackBerry can reclaim not only the market share it lost in the country, but its national pride, as well.

As Andrew MacLeod, BlackBerry’s managing director for Canada, told the Financial Post earlier this: “Canada is incredibly important to [us.] It is our home market, but it is also a very strategic market for us. We are very strong here, and I think we have a very unique relationship here with Canadians, that we treat with an endless amount of respect, attention and resources.”

Earlier this week, Yahoo CFO Ken Goldman spoke at JP Morgan’s Global Technology conference and underscored the need for the aging Silicon Valley Internet giant to attract more users from the coveted 18-to-24-years-old age bracket. Along with more marketing, he explicitly said Yahoo needed to be “cool again.”

“One of our challenges is we have had an aging demographic,” said Goldman at the Boston event. “Part of it is going to be just visibility again in making ourselves cool, which we got away from for a couple of years.”

According to sources close to the situation, that could mean a strategic alliance and investment in or outright buy of perhaps the coolest Internet company of late: Tumblr.

Sources said the talks were serious, but any kind of deal — of course — could come to naught.

But it’s not the first time Yahoo CEO Marissa Mayer has been interested in the New York-based hipster blogging service. As an executive at Google, she had closely watched its fast growth, along with that of Foursquare. Since she took over at Yahoo, several sources said that she has met with its top execs, including founder and CEO David Karp.

But sources said that interest has gotten stronger more recently, coming at the same time as Tumblr has been stepping up its efforts to raise a large funding round that could value the New York company at $1 billion. In a series of fundings since 2007, Tumblr has raised $125 million so far, at a reported valuation of $800 million.

In the latest round, one source close to the situation said Tumblr was considering “strategic” investments, which would presumably be of the kind that Yahoo had tried and failed to do recently with France’s Dailymotion video service. Since then, Mayer and her team have looked at the ongoing deal to purchase Hulu that has many possible other bidders.

Tumblr is different from Dailymotion or Hulu, of course, in that it focuses heavily on user-generated content, largely text and photos, although there is an increasing use of video on the site.

But this puts it directly in Yahoo’s main wheelhouse, especially recent efforts to undergird its strong set of existing media offerings to appeal to a different audience and also get into the social space via consumer-based software solutions that are both elegant and easy to use.

“If you could pick a company that fits in with what Marissa Mayer has demonstrated in her career — aesthetics software technology and fast-growing — you could not land on a better choice,” said another source.

That said, Yahoo has been sticking to smaller acquisitions under Mayer’s regime, spending very little on a clutch of small mobile startups to up its game in the important sector. And at the same investment conference, Goldman also said additional M&A would continue to be smaller for Yahoo.

Still, any kind of deal with Tumblr could certainly bring Yahoo a big, young audience. Its worldwide traffic was at 117 million visitors in April, according to comScore. On its home page, Tumblr claims it has 107.8 million blogs and 50.6 billion posts. U.S. desktop traffic to Tumblr was 37 million in April, close to LinkedIn and Twitter, although Twitter obviously has much more via mobile.

But figuring out how to make money from that audience is a task that the company has only recently started to tackle.

Like other recent Web startups that have seen rocket ship growth — see: Twitter, Facebook — Tumblr resisted advertising for its formative years, and its user base seems particularly unwilling to accept standard banner ads. In addition, many industry observers think that Tumblr’s pages are packed with porn and/or other questionable content that would scare off advertisers.

But within the last year or so, Tumblr has started selling modestly sized “native ads” promoting brands’ Tumblr pages, on users’ “dashboards.” That’s the equivalent of running ads in a Facebook user’s News Feed or a Twitter user’s main feed.

Initial signs are promising. Tumblr told Forbes that it generated $13 million in revenue last year, and suggested it could do as much as $100 million this year; people close to the company say its momentum has continued this year.

In addition to figuring out its top-line business, Tumblr and its backers have also been spending a long time trying to figure out a managment structure. Even Karp’s strongest backers say that the 26-year-old needs help running the company, and for months they have been looking for a “Sheryl Sandberg”-style COO candidate.

“David is very charming, and clearly very very bright, and understands the product,” said an executive who talked to Tumblr about the role. But, “he’s incredibly confrontation averse, and there’s almost a ‘Game of Thrones’ palace feeling to the management team.”

Possibility of death by wildfire aside, sources said that the search has yielded two or three candidates that Tumblr is considering. It is a key hire since the company needs to build out an extensive infrastructure quickly, given its sharp consumer growth, including fielding a more robust advertising team. Tumblr hired an experienced exec, Lee Brown, from Groupon last fall, who has been busy hiring more sales execs. Interesting aside: Brown was a longtime Yahoo ad exec.

But building out the needed structure at the company is a long slog, and Tumblr might be seeking more help one way or another.

Yahoo declined comment and Tumblr has not gotten back to us as yet.

Indeed, during a developer conference session on Thursday, Google showed a variety of ways to gain deeper access to Glass. Some, such as running basic Android apps and even connecting a Bluetooth keyboard, can be done.

Google showed other hacks, such as running a version of Ubuntu Linux. Those actions, though, require deeper “root” access to the device. Google showed how developers can get such access, but cautions that doing so voids the warranty and could be irreversible.

That said, Google plans to make its factory image available so in most cases rooted Glass devices should be able to be returned to their original settings.

The session ended with a video showing a pair of the pricey specs being blended to a powdery mess, to heartfelt groans from the packed audience, many of whom forked over $1,500 to be among the first to buy the developer edition of Glass.

Showing a different level of interest in Glass, several members of Congress sent a letter to Google CEO Larry Page on Thursday asking questions about privacy issues raised by the high-tech specs.

Update: At a follow-up Fireside Chat session with developers, Google reiterated that a software development kit for Glass is coming, but Google’s Charles Mendis said not to expect it soon.

Isabelle Olsson, the lead designer for Glass, showed off one of the bulky early prototype designs for Glass as well as a current prototype that combines Glass with prescription glasses.

Prescription Google Glass prototype

Olsson, who quips that she has been working on Glass since it was a phone attached to a scuba mask, said that the development of Glass was “so ambitious and very messy.”

Getting the device light enough has been a key, Olsson said.

“If it is not light you are not going to want to wear it for more than 10 minutes,” Olsson said. “We care about every gram.”

Asked what kind of apps the Glass team would like to see, Olsson said she wanted a karaoke app, while Mendis said he would like to see some fitness apps.

Google Glass product director Steve Lee said Glass is designed around brief glances or “micro-interactions,” rather than watching a movie or reading an entire book.

“That would be painful,” Lee said. “We don’t want to create zombies staring into the screen for long periods of time.

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Brian Krzanich, who was recently named chief executive, said that although Intel has been slow to respond to the rapid rise of tablets and smartphones, the company is well-positioned to participate going forward.

Read the rest of this post on the original site »

The letter, addressed to CEO Larry Page and signed by eight members of the bipartisan Privacy Caucus, asks Google whether it plans to use facial recognition technology in conjunction with Glass, what proactive steps Google is taking to protect non-Glass-wearing bystanders and what privacy policy changes Google might make for Glass, among other topics.

The group, led by U.S. Rep. Joe Barton, seeks answers by June 14.

Glass, at this point, has a fairly limited range of abilities such as taking pictures, getting directions and performing a search. Developers can build simple apps using a programming interface called Mirror. However, Google announced on Thursday that it is readying a broader Glass Development Kit giving developers deeper access to the Glass hardware.

A Google representative was not immediately available for comment.

Update: At a fireside chat with developers, Google Glass product director Steve Lee said that the Glass team takes privacy seriously.

“From the beginning, the social implications … of Glass, of people wearing Glass, has been at the top of our mind,” Lee said, adding that the team extended its concern not just to those wearing Glass but those around them.

He noted that to take a picture requires pressing a button or issuing a voice command. Also, the Glass screen lights up when the device is active.

Lee said that Glass is operating by Google’s existing privacy policy in terms of what data it collects.

“We’re not really deviating from that,” Lee said.

As for face recognition, Lee said that “we’ve definitely experimented with it but it is not in the product today,” Lee said. “I can imagine that existing.”

Letter to Google From Congress re: Glass Privacy

Image copyright Vlue

And, after confining the audience to their seats for three hours of a hodgepodge of announcements, the CEO of the company came out and bemoaned the industry horse-race mentality (which could be read as hypocritical for many reasons).

Still, the company’s stock spiked up and beyond an all-time high, and everybody raved about how great it all was.

It doesn’t make any sense, of course, unless perhaps you were talking about one of the patented reality distortion field performances of the late Steve Jobs of Apple.

But somehow that’s how it worked for Google this past week at its 2013 I/O developers conference, where nothing big or particularly ambitious was unveiled. Unlike previous editions of the conference that had major reveals, every announcement on Wednesday — dozens and dozens of them — got roughly equal billing and were presented in much the same manner. An exec set up the larger initiative, a product manager did a demo, followed by a feel-good video that showed its potential.

Lather. Rinse. Repeat.

While there were better tools for app developers, a neat-looking new design for Google Maps, features to automatically sort and edit photos, a way to search by voice from your computer the same way you already can from your phone, a personalized music service, a program to distribute educational tablet apps to students, a different set of software for an existing Samsung smartphone and four more languages for Google’s Knowledge Graph, it was still largely incremental.

Why there was no new rev of Android, just when Apple’s Jonny Ive is busy with a radical overhaul of iOS? Where were the new Nexus devices as the smartphone market gets more competitive than ever? What happened to the promise of Android @home and Google TV? If Apple had done this kind of incremental WWDC, they’d be slammed.

Instead, Google I/O got away without launching any significant revisions — not even a .1 release! — or devices for either its Android or Chrome platforms. It didn’t even spend keynote time on its hot topic “moonshot” projects.

Come to think of it, Google CEO Larry Page’s closing speech about the amazing potential of technology to change people’s lives might have been more fitting at the end of three hours about Google Glass and the self-driving cars. Like last year, when his co-founder Sergey Brin organized his Glass skydiving stunt from an overhead blimp down to the stage, streamed via Google Hangout.

But Wednesday wasn’t about the dream-big stuff of tomorrow, it was about today being a better version of yesterday.

In many ways, Google was filling in a structure it had already built. The company brought many products from one device or platform to another. It applied its artificial intelligence smarts for everything from beautifying photos of faces to anticipating potential searches in context. It added analytics to do useful things like help Android app developers see how effective their Google advertising spending is on driving installs. It personalized, personalized and then personalized.

That’s not to say the many products Google introduced at I/O were not impressive when taken as a whole. Rather, the incremental improvements taken together are building out its massive vision. Maybe we’re getting cynical because today’s reality is too close to science fiction to remember when it seemed crazy. Or maybe Google just hypnotized us all.

Even some Googlers conceded this. In a conversation with Johanna Wright, an eight-year veteran of Google who is now VP of search and assist for Android, she made a similar observation about the keynote.

“Having been at Google so long, I feel like there might be no single leap, no single announcement, but the way it’s coming together feels like a huge leap,” Wright said. “There’s a deep understanding underlying it.”

That Google could pull this off so successfully is interesting, especially when you think about one of its main competitors like Apple, where the news cycle is all about secrets and supplier signals and hope and fickle investors and disappointment and scrutiny.

That’s perhaps because Google is not as caught up in that launch-dependent hardware wowing, but rather has picked a line of products that it commits to and continually improves upon and is then held to a different standard.

That’s one explanation, at least.

Whatever the reason, it worked. In after-hours trading, Google stock was at $918.70 after the big show. In its entire history, it had never crossed $900 before that morning.

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Facebook is building an app that allows photos taken on the glasses to be shared directly to the social network. Twitter is doing the same, as well as allowing access to send and receive tweets.

“In addition to sharing photos, you can also keep up with the people you follow on Twitter through notifications — for mentions, DMs and Tweets from users for whom you’ve turned on notifications,” Twitter said in a blog post. “As always, you can reply to, retweet or favorite these Tweets.”

Other partners include Evernote, CNN and Tumblr.

Google also said on Thursday that it is preparing a broader set of tools for developers to write software for Glass.

So far, Google has released a relatively limited programming interface, known as the Mirror API. During a technical session on Thursday, though, Google said it is working on a broader Glass Development Kit.

“We’re actively building it,” said developer advocate Timothy Jordan, speaking to a crowd of developers that filled the main room and an overflow room, and even spilled into beanbag chairs in an impromptu viewing area in the Moscone West lobby.

The developer kit is essentially similar to developing for Android, Jordan said, with some specifics tailored to the Glass hardware.

As for whether there is going to be an app store for Glass, Jordan noted that things are still in the early developer preview phase, but said, “We’re definitely going to have something.”

Google also announced Thursday that it will start supporting video streaming to Glass. Previously, Google had only talked about support for short video clips to be shown on the eyewear.

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Thanks to app tweaks and software updates, it’s easier than ever for you to hand your photographic history over to the company of your choice.

Consider this: Take a photo using your iPhone, and Apple can instantly upload your snapshot to your iCloud account, where it’s accessible via any of your connected Apple devices. Google can do that, too, with Android phones and your Google+ account. There’s Microsoft and SkyDrive integration, Facebook and album image uploading. Not to mention others like Amazon Cloud Drive and Dropbox.

Google doesn’t want to be left behind, as evidenced by the company’s latest robust photo offering. The Google+ team dropped a massive update to its photo-editing capabilities at its I/O developer conference on Wednesday, bringing a series of professional-grade photo-editing tools to anyone who uses Google+.

The advantage here, Google would say, is that while everyone may offer free online photo storage in some capacity, Google is the one with the consumer editing suite. But you don’t have to be an expert-level Photoshop user to work with Google’s new tools. Auto-enhance, auto-highlight and even “auto-awesome” leverage the power of Google’s algorithms to choose the best pictures out of the many you’ve uploaded, and automatically make them look better than they did before.

The point is simple: The more you’ve invested yourself in a service — be it by filling out and continuously updating your profile, or through uploading photo after photo to its cloud-based storage — the less likely you are to fall away from using it. If all of your memories are stuck inside of, say, Facebook, you’ve got an online repository, an album to point others to in the future or to re-download as you see necessary. And, perhaps because of the emotional nature of the material, you’re less likely to even want to move it in the first place.

It’s also the type of media where platforms see some of their highest engagement from users. Facebook, I’ve been told, sees far and away more activity and engagement from users focused on photos in the stream than they do from text-based status updates. Google+, too, sees high engagement from in-stream pictures.

Users aside, big data companies like Google and Facebook gain reams of information from the photos you’ve sent in. Each file is another piece of location metadata to be registered, another image to identify and tag using facial-recognition tech, another way of recognizing the people and places you interact with most in your daily life.

So now, when all companies are offering similar uploading options and essentially unlimited free online storage, it’s up to competitors to differentiate to try and stand out.

That’s easier said than done. Facebook obviously has its billion-strong network (not to mention the rapidly growing Instagram), where many of your friends already likely have a presence. Apple touts accessibility and safety via only a certain set of devices. And Google+, while its usage and engagement stats are constantly a point of contention, will at least offer a simple, powerful photo tool set that gives any amateur photographer the ability to make their vacation pictures look a whole lot better.

In the end, it doesn’t really matter what winds up luring you to one service over another. What matters is how they keep you coming back to upload more of your photos, more of your memories. Perhaps Google’s new editing-feature suite will give it the edge it needs to stay in the game.

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If you haven’t heard of it, here’s the gist: You connect and swipe away rows of matching-colored dots to earn as many points as you can in 60 seconds. If you’re able to draw a square of dots of the same color, it’s like getting a raise on your birthday. You share high scores with friends — and by friends, I mean the Internet. And then you do it all over again. Immediately.

The iOS-only app, which was created by New York City-based Betaworks, has been downloaded more than two million times since it hit the App Store on May 1. Yesterday, I had the chance to catch up with the game’s creators, Patrick Moberg and Paul Murphy, to ask them about the inspiration behind Dots, who is playing the game — including a legion of “Dot-moms” — and what tips they can offer. Below are excerpts from our conversation:

Where did the idea for Dots come from?

Moberg: A lot of the early thinking was just looking at what was already out there, what was highly illustrated or cartoonish, and deciding we wanted to do something new, something that wasn’t out there.

But why dots? Why not coins, or squares, or birds flying through the air?

Moberg: Well, some of my inspiration for the design of the game actually came from the fine art world. I copied and pasted a bunch of fine art images from Google into my design documents and thought, if an app could be like fine art, maybe this would be it. But Dots was also inspired by board games. Old-school board games are fun and playful but have such — I guess the word would be neutral — such neutral personalities that anyone can approach them and play them.

You just crossed two million downloads on Tuesday. What are your engagement numbers like?

Murphy: It’s growing pretty well on its own, with very little marketing on our side. We’ve tracked that 100 million games have been played, so that means 100 million minutes, which is a lot of time. It probably doesn’t help the world with productivity. Every time somebody opens the app, they spend almost five minutes in there, and then tend to come back day after day.

At AllThingsD, some of us have this theory that Dots is a “mom” game. On Mother’s Day, I showed the game to my mom, who isn’t really into new tech or mobile games, and she couldn’t stop playing it. So I guess the question is, what does your audience look like so far?

Moberg: Yeah, my mom went to her Pilates class and said her friends kept telling her how addictive the game was. But she doesn’t have an iPhone. So now she’s thinking of buying an iPhone, so she can play Dots.

Murphy: But it’s not just moms. We started doing research on social networks and Instagram, and it seems a lot of young people are playing it, too. And we don’t have hard data, but we get a little bit of insight through the people that connect through Facebook. We know that it resonates heavily with women, but there are also a lot of men playing, too. So it’s really pretty broad right now.

What’s coming first, iPad optimization or Android?

Murphy: iPad. It’s not that we don’t love Android, but we got a lot of feedback right away from people that want iPad, and our instinct is to listen to the users. On Android it’s a little bit trickier because of the different strategies. One is, just make your app for Android, and the other is, build from the ground up, take advantage of all the features of Android, and we want to do the latter.

When will we see the iPad app?

Murphy: We’re aiming to do something by the end of the month.

You’ve also said that you want to make the app color-blind-friendly. What does that involve?

Moberg: Yeah, that’s something that will be in the next version, but we want to get it right. We want to make it so users can enable a color-blind mode within the existing app. It involves modifying the hue saturation, which is something we’re going to have to test with a lot of people first. It’s a fine line between useable and beautiful.

What are your highest Dots scores?

Murphy: I’m at 380, which is sort of lame. Patrick is — hold on, let me check — 472. He’s done a bit better, but he has access to the leaderboard, so maybe he’s made tweaks to his score.

Moberg: I feel like I’m not that successful at it. I have friends who score much better than I have. It’s a tricky thing. One of my friends compared it to spotting a pitch in baseball. When you see the initial board, you can see whether it’s going to be flush with squares, or even one step away from the initial square. Some people are just good at that.

What is the best tip you can give Dots players? (Readers: Also see this helpful guidebook, courtesy of Quartz.)

Moberg: Other than squares? Finding environments that you’re most comfortable playing in. I find that if I play on the subway when I’m trying to de-stress, it’s not the best. I’m just sort of playing to pass time. I play my best games when I’m home playing Dots with my girlfriend.

Murphy: I’m a big fan of the expanders, so whenever I accrue a lot of points I usually use them to buy a pack of expanders. If you use these at the right time, you can get more squares. The best time is usually at the start of the game.

Are Dots players actually making in-app purchases?

Murphy: People are buying dots, kind of to our surprise. We did want to make the game so people didn’t ever have to spend money and could earn dots just by playing, but also so you can spend a little bit of money and get those features right away.

How much money have you made through the app so far?

Murphy: We don’t really want to share that. But we are making money, so that’s positive.

Can we expect to see any ads popping up in Dots?

Murphy: It’s not in our road map. The game feels different from other games, and I think we’re going to try to preserve that. So we don’t have any ads immediately planned.

When you look at other mobile games that quickly became popular and then sort of fell off — Draw Something comes to mind — what do you think you can learn from that?

Moberg: Well, not to sound silly about it, but we’re testing some of the assumptions around how you’re supposed to do this for mobile games. That might mean the falloff still exists, or maybe this game won’t have that falloff. I don’t know. I think the key is optimizing for longevity instead of optimizing for mobile. When you look at old board games, there were no in-app purchases, right? And yet we’ve been coming back to them for years.

Murphy: The rule book would say, throw a bunch of ads at people’s faces right now! Jack up the prices in the game! And we don’t want to do that. We’re just sort of focused on the game experience.

According to new research from IDC, Microsoft’s mobile operating system accounted for 3.2 percent of global smartphone shipments in the first quarter. That’s a significant gain from the OS’s performance in the first quarter of 2012, which saw it capture a market share of 2 percent. And it was enough for Windows Phone to unseat BlackBerry from its third-place spot and claim the rank for its own.

Admittedly, ousting BlackBerry wasn’t exactly a difficult task. In the first quarter, the struggling handset maker saw its share of global smartphone shipments halved year over year. In Q1 of 2012, it claimed a 6.4 percent share. This year, BlackBerry managed to snag only 2.9 percent.

An unfortunate loss of momentum for BlackBerry, though one that’s not entirely attributable to the ascension of other platforms and a lack of interest in its own. BlackBerry is in the midst of a transition to an entirely new OS, BlackBerry 10. Right now, the company has just two smartphones that use it. The bulk of its handset portfolio continues to run on its older OS. And according to IDC analyst Kevin Restivo, that’s almost certainly having an effect on sales.

“Windows Phone is clearly gaining momentum,” Restivo told AllThingsD. “But BlackBerry’s decline this quarter really has more to do with the lag between sales of its old handsets and its new ones than anything else. Sure, Windows Phone is ahead now, but there’s no guarantee that it will maintain its third-place ranking in upcoming quarters.”

And, as I’ve noted before, third place in the current smartphone OS rankings doesn’t mean much. According to IDC, Google and Apple captured 92.3 percent of all smartphone shipments with their Android/iOS duopoly (Android: 59.1 percent; iOS: 23 percent). In other words, Windows Phone and BlackBerry are so far behind the two leading mobile platforms that their ranking is really just a moot point, anyway.

At $10.2 million and almost a year later, with 70,000 of 85,000 Kickstarter watches shipped to backers, and thousands more preordered on its own site, Pebble is returning to take venture capital on its own terms.

The company has now raised $15 million, largely from Charles River Ventures, led by CRV partner George Zachary.

Asked whether he would have changed anything about the Pebble design if he had access to this kind of capital from the start, Pebble CEO Eric Migicovsky said he doesn’t think so — just that production and hiring might have been quicker.

Plus, he’s proud that Pebble’s Kickstarter success made people pay attention to crowdfunding. “If we hadn’t been rejected by VCs, I don’t think Kickstarter would have had the same effect on early-stage startups that it’s had.”

So why did venture capital bite this time? Just because wearables are so hot right now?

“I just think they have a big lead. The revenue run rate is very substantial,” said Zachary, who usually invests in Web startups like Twitter and Udacity. He added that this, his largest Series A investment ever, brings him back to his roots working on Nintendo 64 at Silicon Graphics.

“Eric thinks the battle will be won with the developer community, so I decided to take a risk on that specifically,” Zachary said.

That’s not to say Pebble is a sure thing — not at all, since Apple and others are expected to soon compete for wrist real estate with devices of their own.

Not to mention competition from Google Glass, the other wearable device that’s making waves now. Zachary said he’s skeptical that people will want to wear computers on their heads, something he worked on 20 years ago at virtual-reality pioneer VPL Research.

As for competing on the developer front, Pebble is releasing staged access to functionality that’s already in the watch. Developers can make their own watch faces and games (5,000 of them so far, installed 300,000 times), and as of today they’ll be able to rig up two-way communication with smartphones.

That should open up space for people to build things like emergency apps (e.g., press two buttons to send GPS to loved ones) and to-do lists, Migicovsky said. Also: Weather, traffic, stocks and Bitcoin prices. “But we’re more interested in the use cases we haven’t been able to predict,” he said.

Alcatel One Touch is a cellphone brand from Chinese consumer electronics company TCL Communications. Its first U.S. smartphone, the mid-range Idol, will make its debut at the end of the month. To get the name in front of more eyes, the Android-based handset is featured in the latest installment of Marvel Comics’s “Iron Man” film series. But in real life it faces the heroic task of going up against smartphone stalwarts like Samsung, HTC and LG.

Unfortunately, this smartphone isn’t going to reach superhero status. I’ve been testing the Idol over the past week, and I found it to be unremarkable. The phone lacks 4G LTE support and is somewhat sluggish, which makes it frustrating to use. Plus, it’s currently priced at $299 without carrier backing. For that money, you’ll get a lot more from the Nexus 4 by LG.

There’s really nothing that sets the Idol apart from the competition. The design resembles a lot of other all-touchscreen smartphones, and without any type of branding on the front of the device, you’d be hard-pressed to pick it out of a lineup of Android devices — not that I want a huge company logo splattered across the front. Alcatel One Touch does offer the Idol in a number of colors, including red, green and blue, but, alas, I received the boring silver one.

The smartphone measures 5.24 inches tall by 2.66 inches wide by 0.31 inch thick, and weighs 3.84 ounces. It’s smaller than the Samsung Galaxy S4, but bigger than the iPhone 5. The construction of the phone is largely plastic, but I didn’t think it felt particularly cheap or fragile. It was comfortable to hold, and I had no problems navigating through the menus with one hand.

The Idol has a 4.7-inch touchscreen with a resolution of 960 by 540 pixels. That’s on par with other midrange smartphones, and the display was bright and clear for reading text and viewing videos. But for the same price, you can get the Nexus 4 with a 4.7-inch, 1,280 by 768-pixel touchscreen, which offers sharper image quality.

Another advantage to the Nexus 4 is that it’s running the latest version of Google’s Android Jelly Bean operating system (4.2.2). The Idol runs on Android Jelly Bean 4.1.1, so it’s not too far behind, but the rate at which it will receive software updates may not be as quick as the Nexus, since the latter is offered directly by Google.

The good news is that the Idol’s user interface is clean and easy to use. The company hasn’t added too many of its own customizations, and it’s not bogged down with useless software. A couple of apps that I found particularly useful were MobiSystem’s OfficeSuite for viewing and editing Office documents, and Movie Studio for editing videos right on the phone.

The quality of the Idol’s main eight-megapixel camera is mediocre. As with many camera phones, I got the best results when taking pictures outdoors in natural light. But even then, I didn’t find the colors to be that vibrant. Photos taken indoors or in low-light conditions were a bit grainy, and using the built-in flash only washed out colors. There were other issues, as well.

To focus, you can tap on the screen, but I found it slow at times (the phone also makes a weird clicking noise). There were also delays when I tried to launch the camera from the lock screen, and a couple of times the camera app unexpectedly closed as soon as I launched it from the main menu. It didn’t give me much confidence for using the Idol’s camera to capture spontaneous moments.

A photo taken with the Alcatel One Touch Idol’s 8-megapixel camera.

Unfortunately, performance issues weren’t uncommon during my time with the Idol. It’s powered by a slower processor than other phones in its price range, and I ran into delays when launching apps or loading social networks like Facebook. There was once instance where it struggled to even get to the main menu of apps, which I have never seen before. The problems weren’t constant, but it was enough to make it frustrating. The speed of the Nexus 4 offers a more fluid experience.

Also, the Idol doesn’t support 4G LTE for faster data speeds. Instead, it works on another 4G standard called HSPA+, which can be just as fast or faster than LTE in some places, but in my testing I didn’t find this to be the case. Using the iPhone 5 on AT&T’s LTE network in San Francisco, I averaged download speeds of 22.04 megabits per second and upload speeds of 18.17 Mbps. Meanwhile, the Idol averaged 3.77 Mbps down and 1.03 Mbps up. To be fair, the Nexus 4 also lacks 4G LTE.

Calls sounded clear, and I didn’t experience any dropped calls. Voices sounded natural, without any disruptive background noise. But the volume can get piercingly loud, even at mid-levels. My friends had no major complaints on their end.

For my battery drain tests, I simulated a voice call with Wi-Fi on, allowing the screen to time out after 30 seconds, and the Idol offered six hours and 18 minutes of continuous talk time. In real-world usage, where I used the phone to check email and social networks, read articles on the Web and watch a couple of YouTube clips, I needed to recharge the phone by early evening.

Sadly, Iron Man can’t save the Alcatel One Touch Idol. At its current price, the smartphone doesn’t hold a candle to the more powerful and robust Nexus 4. Even if the smartphone was eventually offered by a carrier at a cheap price or even for free, the performance issues aren’t worth it.

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