Messinger joined Twitter in 2011 as vice president of application development in the engineering department, where he has been responsible for making key decisions regarding app design and experience, user growth, and search and relevance issues, among other duties. Previous to this, he spent close to four years at Oracle as vice president of development.

Messinger has been described as a “big picture” guy by some, and will move into working on what future versions of Twitter will look like, but from a very high-level standpoint. That could involve the continued integration of Twitter’s satellite application, Vine, and the soon-to-debut Twitter Music application, which has been in the works for some time.

Twitter CTO Adam Messinger

Messinger’s appointment also comes just months after Twitter appointed employees to two other key executive positions, naming long-time Pixar vet Ali Rowghani as company COO, while sliding former Zynga treasurer Mike Gupta into Twitter’s CFO seat. Rowghani used to hold the CFO position, but many have said that he has long been an influential, respected force inside Twitter, and that his move to COO could be seen as a shift in title to reflect the work he has long been doing already.

Twitter’s willingness to solidify its top brass — while charging headlong into the media and advertising world under the direction of global revenue president Adam Bain — looks more and more like a company gearing up for an initial public offering, which many speculate will occur some time in 2014.

VP of Product and Design Michael Sippey

But as I’ve long maintained, that configuration was far from successful. The design department has been a revolving door of exiting employees for the past six-odd months, and a number of the company’s updates to its application in the past have been clunky, counterintuitive or perhaps not as successful as drivers of growth and engagement as Twitter would have liked. It’s a tacit admission that Design just wasn’t meant to report to engineering.

Instead, Design will now report to product, a switch that essentially elevates Sippey to a much loftier position than before. One could see how the Design department would have dictated what product would look like in the future. But instead, Sippey is now charged with the last word in design decisions; essentially, a product guy driving design forward.

That’s even more important considering Twitter co-founder and design visionary Jack Dorsey is far from being involved in the day-to-day stuff of design. Now removed from Twitter and mostly consumed with Square, it’s a large vote of confidence in Sippey’s ability to lead product.

With the series of new appointments, I’d imagine the chatter over Twitter’s IPO and valuation won’t be settling down any time soon.

As I previously reported was likely, former Square COO Keith Rabois will be joining Khosla Ventures as a venture capitalist.

The well-known entrepreneur left the prominent San Francisco-based payments company in the midst of unproven allegations of personal misconduct a month ago.

Rabois, who will start in March, has a lot of informal investing experience as a longtime angel, and is on many public boards, such as Yelp and Xoom, but for the most part, he has played the No. 2 to a string of high-profile entrepreneurs, including Peter Thiel at PayPal, Max Levchin at Slide and, most recently, Jack Dorsey at Square.

And, in fact, Rabois was considering another job like that, deciding between Khosla and a top job at Airbnb, the San Francisco online rentals startup.

But he chose Khosla, he said in a blog post, because he has long wanted to formalize his interest in investing.

Wrote Rabois: “I moved to Silicon Valley in 2000, joining a bunch of misfits who had some provocative ideas about how the world should work. Three years later, I started investing to enable other driven people to chase their dreams. I quickly discovered that the more companies I invested in, the more brilliant and inspirational new people I could encourage. As a result, for twelve years I harboured dreams of becoming a VC who did this every day for a long time.”

The choice of two very attractive alternatives is in stark contrast to the more tense situation for Rabois just a month ago, after accusations of sexual harassment arose related to a relationship he had with a Square employee.

Rabois has denied the allegations aimed at him and at the San Francisco payments company, which have not yet turned into a lawsuit, and has thus far been backed by Square. Rabois called the accusations by the employee “fiction” and a “shakedown.”

That said, due to the controversy around the serious workplace issue, he stepped down from his job as COO.

Square founder and CEO Jack Dorsey endorsed the move in a statement:

“I couldn’t be more excited to see two of the top entrepreneurs I know, join forces at Khosla Ventures to support and coach the next generation of entrepreneurs the world over,” Dorsey said.

Here’s the official press release from Khosla:

Keith Rabois Joins the Khosla Ventures Team

Angel investor, Internet Entrepreneur and Hands-On Advisor
Brings His Experience to Khosla’s Broad Portfolio of Companies

MENLO PARK, Calif., February 26, 2013 — Khosla Ventures, a venture assistance firm that focuses on sustainability and technology startups, announced today that Keith Rabois, a former PayPal, LinkedIn and Slide executive, will join the firm. Most recently Keith was chief operating officer at Square, a Khosla Ventures portfolio company, where he oversaw all aspects of business operations, including marketing, communications, business development, distribution, human resources and risk management.

While serving in executive roles, he has also developed a distinguished track record angel investing in technology companies, such as YouTube, Yammer, Airbnb, LinkedIn (NYSE: LNKD), Quora, Palantir, and Eventbrite.

He will begin his new role at Khosla in March 2013.

“I love Khosla Ventures’ vision and passion for assisting the next generation of entrepreneurs,” said Keith Rabois. “The Khosla team encourages entrepreneurs to be bold. And the team’s legendary work ethic ensures that entrepreneurs will receive the best possible assistance.”

“We are thrilled to have Keith join us as he has shown himself to be a great investor, but even more importantly he’s a true advisor. Our extensive conversations with entrepreneurs repeatedly elicited comments like, ‘he asks the toughest questions’, ‘he pushes me the most and makes me think’, ‘he is always there when I need help’, ‘he is the most valuable among all my board members and advisors’, ‘he can imagine the future’,” said Vinod Khosla, founding partner of Khosla Ventures. “Our belief in bringing the best venture assistance to our companies is why we’re very excited about the newest addition to the Khosla Ventures team. He truly has earned the right to advise companies.”

Jack Dorsey, the CEO and founder of Square added, “I couldn’t be more excited to see two of the top entrepreneurs I know, join forces at Khosla Ventures to support and coach the next generation of entrepreneurs the world over.”

Keith currently holds board roles at Xoom (NASDAQ: XOOM), since June 2003, and Yelp (NYSE: YELP), since September 2005.

Keith Rabois, the former Square COO who left the company in the midst of unproven allegations of personal misconduct, is weighing an offer to join Silicon Valley venture firm Khosla Ventures, according to sources close to the situation, and is currently leaning toward accepting the job there.

But, that could change. In an interesting twist, the longtime entrepreneur and investor has also been in discussions with Airbnb CEO and co-founder Brian Chesky to become COO or president there.

Both the VC and the startup have been doing reference checks on Rabois, news of which has gotten out in the ever-chatty Silicon Valley scene. The Wall Street Journal reported earlier today that Rabois had been in talks with the San Francisco-based online housing rentals company.

But sources with knowledge of the situation said that Rabois — who has played the No. 2 to a string of high-profile entrepreneurs, including Peter Thiel at PayPal, Max Levchin at Slide and, most recently, Jack Dorsey at Square — seems “99 percent” ready to move into a more formal investing role.

Of course, there is still that one percent chance he might not, underscored by the eternal lure of the hot startup for serial entrepreneurs like Rabois. That said, he has also been an active angel investors for many years, with a wide-ranging portfolio, and is on many boards, including Yelp’s.

The choice of two very attractive alternatives is in stark contrast to the more tense situation for Rabois just a month ago, after accusations of sexual harassment arose related to a relationship he had with a Square employee.

Rabois has denied the allegations aimed at him and at the San Francisco payments company, which have not yet turned into a lawsuit, and has thus far been backed by Square. Rabois called the accusations by the employee “fiction” and a “shakedown.”

That said, due to the controversy around the serious workplace issue, he stepped down from his job as COO.

“At the end of the day, this is personally embarrassing to me, because when anyone’s life is exposed to a public forum, it creates quite a damaging situation,” said Rabois at the time in an interview with me. “As we looked at it, it was going to become a distraction that was going to hurt the company.”

Sitting in front of a spectacular view of San Francisco at his home this afternoon, former Square COO Keith Rabois looks spent.

He is just recovering from a bout of pneumonia, which would be bad enough, but it’s clear from his tense and unusually — for him — disheveled appearance that the sexual harassment claim made by a current male employee at the San Francisco payments startup has taken its toll on the typically hard-charging exec who is not known for suffering fools.

But, now, given a judgement he made to continue in a personal and physical relationship with that unnamed junior staffer after he was hired at Square, Rabois feels both foolish and also angry.

“At the end of the day, this is personally embarrassing to me, because when anyone’s life is exposed to a public forum, it creates quite a damaging situation,” said Rabois. “As we looked at it, it was going to become a distraction that was going to hurt the company.”

It appears as if he wanted to stay — he shrugs when directly asked about it, though he will not say so explicitly. But, Rabois finally agreed with Square’s top management, including CEO and founder Jack Dorsey, that is was better that he leave.

“It was very clear once this outrageous demand was made, instead of building great products, it would be all about that,” he said.

That said, after an internal investigation, the company is backing him in the expected filing of a lawsuit from the employee, who has threatened a panoply of explosive allegations against him and the company that Rabois said again are a “fiction.”

He declined to show me any texts or emails between the two, but did recount the relationship in a blog post on Tumblr earlier today.

Richard Curiale, outside counsel for Square and also Rabois, said that the company had been approached about two weeks ago by New York lawyer Steven Berger, claiming the company knew of and did nothing to stop sexual harassment by Rabois and demanding a multi-million dollar settlement.

Curiale said he found no evidence in his investigation so far of anything except a “welcome” relationship that ended. He had even agreed to make Rabois available for a deposition with Berger, but the offer was refused.

I have an email into Berger for comment, which has thus far been unanswered. But Square has said it will fight any lawsuit filed and is currently supporting Rabois.

“I have not as yet found any conduct that is illegal and therefore there is no adverse relationship between Keith and Square,” said Curiale. “We don’t pay for claims that have no merit to them, because it amounts to extortion.”

Perhaps so, but it also amounts to a very juicy story — the second such major blowup in Silicon Valley in a year. The other — now a lawsuit alleging gender discrimination and retaliation, and a countersuit — between the well-known venture capital firm, Kleiner Perkins, and former partner Ellen Pao, is ongoing.

The particulars of the Rabois situation, per his side of the story, which he claims is supported by much evidence, is of a social and physical relationship with a man he met several years ago.

While he would not call their relationship dating, it was close and personal, including taking this man out with him to social events.

The problem came when he recommended this man for a job at Square and he was hired. The company was much smaller then, about 30 people, but as it grew Rabois insists he had no direct oversight of the employee and also did not treat him differently from others he managed at the company.

Rabois claims he gave him advice, as he did other employees, but neither helped or hindered the man in his efforts to advance.

The man and Rabois were still seeing each other socially until December, when the relationship cooled.

And then came the lawsuit threat two weeks ago, which Rabois said “stunned” him.

Square says that it was not aware of the personal relationship until the threat of the lawsuit; the employee has never made any complaints about Rabois to management.

Spokesman Ricardo Reyes said that “what we have here at most is bad judgement and we will defend ourselves.”

In this Rabois agrees, as he fields emails of support from his wide range of friends and colleagues in tech, where he is well known as an entrepreneur and angel investor.

“I have several good ideas of what I want to do next,” he said.

In a major exec departure, Square COO Keith Rabois will be leaving the San Francisco payments company.

Square gave no other information about the sudden management change, but sources said disagreements between Rabois and CEO and founder Jack Dorsey were part of the reason for his exit.

It’s not clear if there were more serious issues between them, or whether the parting was related to a specific business problem. But the departure of the No. 2 exec is significant, so definitely more to come on what happened.

In a statement about the move, Rabois only said:

It is amazing what Square has accomplished since August of 2010. When I joined, there were 17 engineers all reporting flatly to Jack. The local coffee shop served as our interview room. Leading our amazing crew has been the most rewarding professional journey of my life. I am forever grateful to Jack, for his confidence in me and to each and every member of the team for allowing me to learn from them.

But every day matters. And it is better at this point for me to be doing something different every day.

As a result, I’ve decided to resign from Square. I am very excited about what lies ahead for the company. Square could not be better poised for greatness.

I will have more to share about my next opportunity soon.

Said Square’s Dorsey:

Today I accepted Keith’s resignation from Square. When he joined, we had fewer than 30 employees and under 1000 active merchants. Today, over 3 million individuals and businesses are able to accept credit cards with Square, processing over $10 billion annually. We couldn’t have done it without him and we wish him well in his next opportunity.

Square CFO Sarah Friar will become acting COO, Square said. It’s an unusual move to put an exec without a lot of deep operational experience in the second-most-important slot at Square, though the former Goldman Sachs analyst and Salesforce.com finance exec is clearly familiar with the heart of the company’s business.

The change in top management comes at a time of fast growth for the three-year-old Square, which completed a $200 million funding round in the fall that valued the company at $3.2 billion. At the time, the company said it had more than 400 employees and would grow by 100 more by year’s end.

Square is best known for allowing a range of small businesses, such as taxicab drivers, to accept credit and debit cards using their mobile phones. But it has also branched out into other mobile payments areas.

Besides his stint at Square, Rabois is a well-known angel investor in Silicon Valley, and serves on several boards, including Yelp’s. He has worked at many startups, too, including PayPal (acquired by eBay) and Slide (acquired by Google).

Square

No, it’s not some fruit-centric start-up. This is Square, the micropayments company aimed at changing the way people make transactions. I’ve stopped by in the middle of the company’s semiannual Hack Week.

For one week during December, employees are given free rein to work on whatever they want, payments-related or not. Some take the time to work on Square-centric ideas that they don’t have time to tackle during their packed work week, when they’re hyperfocused on whatever department they may reside in. Intermingling between the departments is encouraged, so folks who don’t normally work together daily get to meet up and collaborate on a project for the week.

There’s a giant board in the center of the office, smattered with rough sketches of ideas and multicolored Post-It notes. It’s a scattered road map of the product direction the company wants to head over the next year or so (a few top-secret ones were taken down off the wall before I arrived). Each idea was stamped with four or five Post-it notes, with every different color representing a different department member.

Some items are purely creative exercises, stretching the proverbial neural muscles. Founder Jack Dorsey, for example, spent the week attempting to rewrite some of Square’s code base using the French programming language OCaml. (Well, maybe not the whole thing.) Other attempts may end up yielding something tangible: In the past, Hack Week projects like wireless receipt printing and political fundraising have ended up in the Square consumer product itself.

And then some Square people, like Justin Shearer, a very nice engineer I met, decided to work on electronic fruit.

It stemmed (ha!) from chatter around the office when Hack Week began, as folks spouted off about the random ideas they considered tackling for the week. On the whole, Square employees are big fans of Reddit, the massive social link-posting site where memes are born (and where productivity goes to die). The banana phone was a meme that rose to prominence on sites like Reddit, so naturally it came up as a potential Hack Week project. No one took it seriously at first. Except for Shearer.

“Challenge accepted,” as he put it, in familiar meme parlance. It’s actually a cheap, prepaid cellular phone straight from the shelves of a Best Buy, taken apart and rewired to fit inside a fabricated banana. And it really works — Shearer sent me a text from it.

I tell you about all this with some sense of whimsy. But hackathons are commonplace these days in the Valley. Companies sponsor them, often in the days before a big tech conference. Google lets its employees take 20 percent of their time and devote it to other projects not specific to their main jobs. Facebook literally has “hacking” written all over its IPO paperwork.

But Dorsey thinks Square’s Hack Week is special. Google’s 20 percent time is too liberal, which could lend employees to lose focus on their tasks at hand. On the other end of the spectrum, companies like Facebook treat every day like a Hack Week, “moving fast and breaking things” on a regular basis.

“Neither of those models can really create proper cohesion,” Dorsey told me.

Indeed, both Facebook and Google treat hack time antithetically to Square’s company model of hyperfocused, rigorous attention to the process, tweaking and refining ideas and products until they come out just so. Square — and Dorsey, in particular — is known in the Valley for the “devil in the details” philosophy of product design, not to mention clocking crazy long hours at the office to get things right. It’s not for the faint of heart.

The Hack Week, then, is a way of blowing off steam, directing attention away from an employee’s particular area of expertise and freeing his or her mind to play with other ideas. “During Hack Week, we prioritize expediency over quality,” said CTO Bob Lee. “We artificially constrain ourselves to spark innovation. Creativity loves constraints.”

But not too much constraint — nor too little. “It’s tough to find the right time medium to do it in,” Dorsey said, as “one to two days aren’t generally enough to get something finished,” but a constant “hack around the clock” culture like other companies may espouse just doesn’t work for the Square model. A week seems to settle it.

Some teams use the time to create systems that make their daily work lives easier. One fellow, whom I’ll dub the hardware property master, created a rudimentary inventory system to keep track of the myriad Android and iOS devices used to test builds of Square’s software. As you might imagine, phones and tablets often have a hard time finding their way back to the lock-up.

Others find a balance between product relevance and straight-up fun. A group of five assembled a functioning, physical odometer to be hung in the center of the office. It keeps a running tally of Square’s daily GPV — or gross payment value — the total sum of transactions processed by Square every moment.

At the end of the week, everyone comes together at Town Square (the weekly companywide meeting) to vote on the winning prototype. It’s a combination of function and fun, and not always a popularity contest.

I haven’t heard who took home the first place trophy. My bet: There’s always money in the banana phone.

(Take a look at this very funny Hack Week video below, produced by a team of Square employees.)

A year and a half ago, VeriFone unveiled a product that would give small-to-mid-sized retailers the ability to use an phone or tablet to accept payments. But during a quarterly conference call this week, Verifone chief executive Doug Bergeron explained that the company would be discontinuing the service, called Sail, because it is unprofitable.

“Customer acquisition costs, either through search engines or TV advertising cannot and will never justify the razor thin margins produced by merchants with infrequent volumes and extremely high attrition.”

Square must be feeling a little bit vindicated that VeriFone couldn’t hack it in the space, given the two companies’ ongoing rivalry. The two first started bickering more than a year ago after VeriFone wrote an open letter about Square, calling out a potential security flaw in its mobile-phone card reader.

When Square promised to add encryption to its devices as part of an investment by Visa, VeriFone felt like it won that battle. Shortly after, it unveiled Sail, which was targeting smaller merchants, such as food trucks or taxicab drivers — much like Square.

VeriFone said that, going forward, it will focus exclusively on providing mobile payments to small merchants through an indirect channel. The company plans to sell off its assets, although it didn’t expect a deal to be financially meaningful to the company. Reuters first reported the company’s moves on Thursday.

As part of the call with investors, Bergeron didn’t stop at explaining VeriFone’s reasons for exiting the business. He also took the time to question whether the model was flawed for all companies, and not just VeriFone.

“I think you can see evidence of other competitors’ similar experience as they shift their own business models to wallets. My belief is that the only possible survivors in this fundamentally challenging business model will be companies who might have an opportunity to provide other services to these micro-merchants.”

Bergeron’s statement does bring up a good question: If charging a flat rate of about 2.75 percent per transaction doesn’t pay off for the mobile payments industry, then what other features will they have to build in order to bring in revenue?

Square, which is now processing $10 billion annually in transactions, isn’t the only company in the space. Other players include PayPal, Intuit, Pay Anywhere and, more recently, Groupon. For them, it’s not all about the transaction fee. For instance, PayPal is focused on providing a digital wallet, while Groupon’s main business is offers.

Square gets a disproportionate amount of attention in the space because the start-up is led by Twitter’s Jack Dorsey, and because it has made a lot of progress quickly.

As Bergeron suggests, Square has started to shift its focus toward providing other services. For instance, it would like consumers to visit its mobile app to discover new local restaurants and find offers and discounts. A recent partnership with Starbucks, in fact, is designed to help lift consumer adoption of its mobile app. Rather than use the standalone Starbucks application, consumers will be encouraged to pay for their lattes with the Square Wallet. In theory, the partnership could naturally lead to consumers using the app more.

To be clear, there’s no indication that Square has ever shifted its strategy. Logically, it would make sense for it to build up its base of merchants before trying to get consumers to start using a wallet that wasn’t accepted at a lot of shops.

So far, it’s just VeriFone getting out of the race. Will others follow?

Lots of them, actually: The company just rolled out digital gift cards that can be exchanged between both Square and non-Square users. The cards can be presented and redeemed in a variety of ways, including through Apple’s Passbook app — Square’s first integration with Apple’s new digital wallet.

Square creator Jack Dorsey was taking interviews earlier today in New York City and showing off the new gift cards.

Here’s how it works: A Square user must first update the existing consumer-facing app, simply called “Wallet” (formerly named Pay with Square). Or, if you’ve never used Square, you’ll have to download the Wallet app.

From Square’s directory of approximately 250,000 businesses — merchants using Square software on an iPad to process their in-store payments — a consumer can opt to send a friend or family member a gift card from one of those stores. This, of course, includes digital gift cards from Starbucks, which recently began using Square to process credit card transactions at 7,000 locations across the U.S.

An email will then be sent to the recipients, with a few different options for redeeming the gift card. The customer can use Square themselves, send the gift card to their Apple Passbook app on iPhone or just show a QR code at the store. The recipient can also print out the QR code from their email, if they want to skip using a smartphone entirely.

By working with Passbook, Apple’s digital wallet app for iOS 6 that stores loyalty cards, coupons and airline boarding passes, Dorsey said the company is hoping to turn even more consumers on to Square. He also said the gift card program will appeal to Square merchants, as it doesn’t involve additional issuance fees — just the standard Square processing fee.

But the biggest benefit is probably the word-of-mouth marketing Square will get as its users send around digital gift cards. The company also further establishes itself as some sort of card issuer.

In other words, it might not really matter to Square if people actually end up using the gift cards — and there’s a good chance you won’t. Last year it was reported that from 2005 to 2011 the total amount of money on gift cards that went unspent could be as much as $41 billion. At the same time, merchants still reap the benefits of the upfront purchases of a gift card (in most U.S. states).

Sure, having a gift card on your smartphone might make it easier for some people. But there’s probably also a huge segment of consumers that haven’t adopted digital gift cards yet.

Dorsey also talked about Square’s international expansion plans, and said the company plans to make its first official footprint overseas within the first half of 2013. He declined to say whether that will first occur in Europe, Asia or South America. “Europe uses chip and pin technology, which we have to look at closely. In Japan, consumers are using their smartphones for more and more things, and in places like Brazil new technologies are just adopted so rapidly … they’re all pretty exciting,” Dorsey said.

The rollout is right on schedule, coming just three months after the partnership was announced in August. Now Starbucks customers will have two options for paying without ever having to pull their wallet out of their purse or pants pocket.

Starbucks customers already tend to be early adopters of mobile payments, using the Seattle coffee merchant’s apps more than two million times each week across both iOS and Android.

There are a few differences between the two experiences. The Starbucks-branded app card requires users to load a prepaid card that is stored on the phone. In contrast, the Square app allows users to pay using a debit or credit card. The Starbucks app also allows consumers to earn reward, but the Square app will not. Either way, a barcode is displayed on the smartphone screen and is scanned by a reader at the register. The Square Wallet is more multipurpose, given that it can be used to pay at other participating restaurants or merchants.

The addition of a marquee name like Starbucks is a big deal for San Francisco-based Square, which was founded by Twitter’s Jack Dorsey. Square obviously needs to raise its profile among consumers and sign up more merchants if it wants to become the dominant mobile payments system. However, the arrangement doesn’t end at the register. Starbucks also invested $25 million in Square’s last funding, totaling $200 million, and its CEO, Howard Schultz, joined the private company’s board. Starbucks is also slowly switching over its back-end payment systems to Square, which will eventually be processing all of Starbucks’ U.S. credit and debit card transactions.

Customers can download the Square wallet from the respective markets on iOS or Android. If they have already downloaded the wallet, the Starbucks locations will appear automatically.

“RIP Fail Whale.”

Indeed, all throughout Nov. 6, that cutesy, once-ubiquitous cartoon — a symbol of a young Twitter’s infrastructure problems — was nary to be seen. The company saw record numbers of tweets flowing through the system, peaking at 327,452 tweets per minute as news orgs around the country called the race for President Obama. Despite the heavy load on the company’s servers, Twitter’s engineering team held fast.

And for a company trying to ensconce itself firmly into the online habits of billions of people, this was the best possible outcome.

You’d be forgiven if you aren’t familiar with the whale. A childlike image first created by illustrator Yiying Lu, the whale was adopted by Twitter as an error-page graphic. When the system was overloaded with too many tweets, users were greeted with the fail whale’s smiling face, a notification that the service was currently “over capacity.”

This was a mainstay of Twitter’s earlier days. Especially so during major world events, which inevitably spawned more tweets than Twitter’s infrastructure was accustomed to handling. Though the site maintained upward of 98 and 99 percent uptime on the whole, outages were glaring — and the digerati made sure to let it be known:

But, as the company has crawled out of its adolescence, the goal has been to eliminate all signs of the early instability. Twitter wants to become a mature, easy-to-use product. Akin, say, to a Facebook. Something your grandmother can use.

So, along with Jack Dorsey’s mantra of simplifying the product, keeping the service up, running and reliable has been priority number one for CEO Dick Costolo. Bare minimum, Twitter needs to always be on, no matter what. “It’s a metaphor for the entire company,” Costolo has said in previous press interviews.

It’s not just users that Costolo needs to woo. Amid a questionable financial climate for Internet companies, Twitter must prove to partners that its service can handle the strain of untold amounts of data flowing through its pipes daily, while still serving up the ad products that sponsors pay so dearly for. After all, Pepsi’s Promoted Tweet isn’t any good if the entire network is down for the count.

Though the service has proved more reliable in recent times, it has not been without its share of setbacks. Twitter went through a two-hour period of downtime this past summer, the longest continuous outage the microblogging site has experienced in more than a year. And little more than a month after this, Twitter again had serious site problems, going in and out of service for upward of a few hours.

But, as the polls closed and returns started pouring in on Tuesday evening, this wasn’t the case. It was Twitter’s watershed moment, performing as it should during the most tweeted-about political moments in the service’s six-year history.

Twitter’s struggles with infrastructure reminds me a bit of Herman Melville and his Captain Ahab. Indeed, a sea beast was the deranged captain’s ultimate undoing, never having sunk the final, fatal harpoon into Moby Dick’s pale and barnacled brow.

Perhaps, unlike Ahab, Twitter has finally put its great white whale to rest. We’ll see, come 2016.

Here’s what really happened: The social shopping site raised a $26 million round. That follows a $10 million round it raised from French fashion conglomerate PPR a year ago. The Fancy and its parent company Thing Daemon have now raised $42 million to date.

The Fancy’s SEC filing doesn’t explain where the new money came from, though it does contain an interesting hint: American Express vice chairman Ed Gilligan is now listed as a member of Thing Daemon’s board, along with PPR CEO Francois-Henri Pinault. I’ve put in queries to AmEx and to Thing Daemon/Fancy founder Joe Einhorn, but there’s a good chance they’re distracted today.

Other Thing Daemon board members include Twitter/Square’s Jack Dorsey, and Facebook vet turned investor/publisher Chris Hughes.

Thing Daemon was originally supposed to be an ambitious effort to create a “Facebook of Things.” But it has now evolved into The Fancy, which is essentially a fashion-forward version of Pinterest, with an explicit e-commerce option built into the site.

Here’s an interview with Einhorn from way back in December 2010:

]]> http://allthingsd.com/20121029/shopping-site-the-fancy-sells-a-26-million-round/feed/ 0 http://allthingsd.com/20121025/jack-dorsey-still-has-pull-at-twitter-just-ask-the-vine-guys/ http://allthingsd.com/20121025/jack-dorsey-still-has-pull-at-twitter-just-ask-the-vine-guys/#comments Thu, 25 Oct 2012 10:00:38 +0000 Peter Kafka and Mike Isaac http://allthingsd.com/?p=263483

Asa Mathat | AllThingsD.com

Earlier this month Twitter bought Vine, a three-man video-sharing start-up that has yet to launch. Twitter may build its own video hosting system, so it’s possible Vine may play a role in that effort one day.

But the main reason Twitter bought Vine is more concrete: Jack Dorsey wanted Twitter to buy Vine.

Multiple sources say the Twitter co-founder was the one who decided that the company should buy the start-up, and pushed hard to make the purchase happen.

While CEO Dick Costolo ultimately signed off on the deal, “this happened because Jack wanted it to happen,” says a person familiar with the transaction.

And while this isn’t a mammoth transaction by 2012 standards, it’s still one of the biggest acquisitions Twitter has made. If the Vine guys stick around and hit their numbers, the company may end up paying north of $30 million for the start-up.

Lesson: Whatever else Jack Dorsey is up to at Twitter, he still has significant clout there.

Here’s the longer version of the Twitter/Vine story, as relayed to ATD by people who know both companies:

Vine, which is supposed to let users share brief video clips from their iPhones, formed in June and was supposed to launch this fall. SV Angel’s David Lee, who had backed Vine, showed Dorsey the app in the hope that the design guru would give it his seal of approval.

Instead, Dorsey ended up pushing to buy the company — not as a standard “acqhire,” but with the notion that the Vine guys would keep working on the app and release it on their own.

The arrangement is supposed to echo the one that Facebook and Instagram reached earlier this year, and that’s not a coincidence. At one point, Dorsey had pushed Twitter to buy that photo-sharing app, as well.

Vine and its investors turned down Twitter’s first offer. They accepted a second, much larger one.

Vine’s backers got Twitter stock, and Vine’s three-man team got a mix of cash, stock and incentives. The Vine guys are now Twitter employees, but they won’t go to work there. Instead, they’ll stay in their New York headquarters and keep working on their app.

Can’t wait to see it.

]]> http://allthingsd.com/20121025/jack-dorsey-still-has-pull-at-twitter-just-ask-the-vine-guys/feed/ 0 http://allthingsd.com/20121022/square-secures-new-offices-as-headcount-soars-to-1000-in-2013/ http://allthingsd.com/20121022/square-secures-new-offices-as-headcount-soars-to-1000-in-2013/#comments Mon, 22 Oct 2012 17:33:49 +0000 Tricia Duryee http://allthingsd.com/?p=262287 Square, the mobile payments company started by Twitter co-founder Jack Dorsey, announced today that it will be moving its corporate headquarters next year to 1455 Market Street in San Francisco’s Central Market neighborhood (next to Twitter). The move will help accommodate the company’s hiring plans, which include adding about 600 employees over the next year to reach a total of 1,000. Square expects to move into its new location, which will have a chef’s kitchen and rooftop deck, by mid 2013.

]]> http://allthingsd.com/20121022/square-secures-new-offices-as-headcount-soars-to-1000-in-2013/feed/ 0 http://allthingsd.com/20121015/also-on-twitter-boards-agenda-adding-a-woman-director/ http://allthingsd.com/20121015/also-on-twitter-boards-agenda-adding-a-woman-director/#comments Mon, 15 Oct 2012 16:33:36 +0000 Mike Isaac http://allthingsd.com/?p=259960

In its continued search to strengthen the company’s board of directors, Twitter has placed top priority on adding a woman to the current all-male roster, according to sources close to the situation.

A number of female candidates have already been interviewed, but none have been selected, these sources say.

It’s an obvious logical step for the microblogging service.

As Kara Swisher noted nearly two years ago, Web 2.0 companies have few women board members, unlike a number of public tech companies.

That includes Google, Apple, Microsoft, Amazon, LinkedIn and eBay — major technology companies whose boards include one or more women.

But Twitter does not.

It has not been alone. Facebook added its first female director only recently, with COO Sheryl Sandberg being appointed to the board over the summer. That was soon followed by Zynga, which named longtime digital exec Ellen Siminoff recently.

Twitter’s search for a female director does not sideline the company’s continued search for other seasoned media players to join its board.

As previously reported, sources say that Hollywood exec Peter Chernin has been on Twitter’s short list for a seat. Along with years of experience at News Corp., Chernin played a role in the formation of the Hulu streaming video service, and currently sits on the board of Internet radio Web site Pandora.

Currently, Twitter’s board includes CEO Dick Costolo, company founders Jack Dorsey and Evan Williams, and investors such as Peter Fenton of Benchmark Capital and Peter Currie of Currie Capital. Former DoubleClick CEO David Rosenblatt also holds a seat.

After conflicts of interest arose, Flipboard CEO Mike McCue stepped down from his board position over the summer. McCue’s seat is presumably the one being filled, but the size of the board might also expand by two or more.

Considering the company’s recent push into the mainstream film and television arena, along with seeking more advertising revenue, the lack of at least one major media exec on the board could be seen as a deficiency.

Twitter declined to comment on this report.

]]> http://allthingsd.com/20121015/also-on-twitter-boards-agenda-adding-a-woman-director/feed/ 3 http://allthingsd.com/20121011/a-ride-in-a-square-cab-as-mobile-payments-company-winds-down-taxicab-testing-video/ http://allthingsd.com/20121011/a-ride-in-a-square-cab-as-mobile-payments-company-winds-down-taxicab-testing-video/#comments Thu, 11 Oct 2012 17:00:12 +0000 Lauren Goode http://allthingsd.com/?p=258779 In New York City, there are currently 13,237 official taxicabs equipped with technology from either VeriFone or Creative Mobile Technologies to process credit card payments.

But over the past six months, riders may have seen something a little different in the back of taxicabs: An iPad you can swipe your credit card through, installed by the mobile payments start-up Square.

Back in March, Square, led by Twitter co-founder Jack Dorsey, won the approval of the New York City Taxi & Limousine Commission (TLC) to run the test pilot. Of the 30 cabs that were approved, approximately half of them were outfitted with Square.

In other cities — San Francisco, Portland, Miami and Seattle, to name a few — thousands of taxi drivers rely on a small Square card reader, plugged into a smartphone, to accept riders’ credit card payments. In New York City, where the card readers aren’t allowed, the system was a little different.

For riders, a “Square cab” includes a touchscreen iPad, on which they can sign their credit card receipts with their fingers and request paperless receipts through email or text. For the 15 drivers, it meant paying a lower transaction fee — 2.75 percent per charge — almost half the processing fees they normally pay, which run as high as 5 percent per transaction.

Now, after 34,000 rides and 100,000 miles traveled, Square says it’s winding down the taxicab pilot over the next few weeks. So what happens next?

Earlier this week, a Forbes story indicated that Square was about to a sign a contract to power payments in taxicabs in the city, based on a report from a business research Web site called PrivCo. Both Square and a spokesperson for the Taxi & Limousine Commission have vehemently denied that there is any sort of contract in place.

In fact, Allan Fromberg, spokesman for the TLC, says there currently isn’t a contract to be had at all. The TLC is planning on introducing a new set of rules and specifications for taxicab payments in the coming months, and will open up the market to companies that can meet those specifications. Fromberg declined to say whether the new rules will involve mobile technology, or systems that would support lower transaction costs.

He did say that the Square pilot has, for all intents and purposes, been a success. And Square seems to agree.

“We’re very grateful to the NYC Taxi & Limousine Commission for partnering with us on this pilot,” a Square spokesman said in a statement. “We’ll use our findings to further improve Square and make commerce and transportation even easier for millions of riders and drivers in New York and around the country.”

To see how Square works in the back of a New York City cab, check out the AllThingsD video below:

]]> http://allthingsd.com/20121011/a-ride-in-a-square-cab-as-mobile-payments-company-winds-down-taxicab-testing-video/feed/ 3 http://allthingsd.com/20121009/dorsey-on-reduced-role-at-twitter-move-on-nothing-to-see-here/ http://allthingsd.com/20121009/dorsey-on-reduced-role-at-twitter-move-on-nothing-to-see-here/#comments Tue, 09 Oct 2012 15:18:16 +0000 Kara Swisher http://allthingsd.com/?p=258286

Today on Tumblr, Twitter inventor Jack Dorsey clarified a story in the New York Times that seemed to imply that he had been sidelined from a more active role at the company.

Among the issues raised by the piece, which was in a longer profile of CEO Dick Costolo, was that Dorsey was “difficult to work with.”

Wrote the Times’ Nick Bilton:

“Mr. Dorsey’s role has since been reduced after employees complained that he was difficult to work with and repeatedly changed his mind about product directions. He no longer has anyone directly reporting to him, although he is still involved in strategic decisions.”

Dorsey had taken a larger role in the social communications company after its other founders, Evan Williams and Biz Stone, were, well, kind of sidelined several years ago. Dorsey, in turn, had been frozen out of the San Francisco company by them previous to that.

Got it? Well, according to Dorsey, this is not so much a geek version of “Dynasty” as it is business as usual.

“We haven’t talked about this publicly because it’s not what people using Twitter every day care about,” he noted, explaining he was brought in to help for a spell, and now is back to focusing on his other company, the white-hot payments start-up Square, where he is CEO. Dorsey remains Twitter’s chairman, too.

It’s a lot of inside baseball, of course, but still interesting.

Here’s Dorsey’s full post:

There was a great profile in the New York Times about Twitter’s CEO, Dick Costolo, which mentioned my work at the company. It’s not a common arrangement, so I’d like to clarify a few points.

In Spring of 2011, Dick asked me to take an operational role overseeing product, design, and brand. Our shared goal was to get those organizations back under him as soon as possible, simply because it was the right thing to do for the company. We moved all of my reports back under him in January of this year after leadership was firmly in place. This allowed me to focus on refining our brand and logo, to work more with Dick and the leadership team on our direction forward, and ultimately return the majority of my time to Square, where I’m CEO. I’m back to going to Twitter on Tuesday afternoons, something I started before taking the interim operational role.

We haven’t talked about this publicly because it’s not what people using Twitter every day care about.

I’m fortunate in life to be a part of two foundational and mission-driven organizations, and I’m always going fight like hell to make them thrive. And they are! Now back to our work.

]]> http://allthingsd.com/20121009/dorsey-on-reduced-role-at-twitter-move-on-nothing-to-see-here/feed/ 0 http://allthingsd.com/20120929/mega-multitasker-jack-dorsey-finds-time-to-tout-candy/ http://allthingsd.com/20120929/mega-multitasker-jack-dorsey-finds-time-to-tout-candy/#comments Sat, 29 Sep 2012 22:40:33 +0000 Ina Fried http://allthingsd.com/?p=255490 You might think Jack Dorsey would be a bit too busy with his two day jobs to be doing commercials. And you’d be wrong.

The Twitter and Square executive is among those endorsing Unreal. He joins actor Matt Damon, supermodel Gisele Bundchen and quarterback Tom Brady in a video ad for the candy.

While not pitching its chocolates and candies as healthy food, Boston-based Unreal focuses on the fact that its products use “real ingredients” rather than the corn syrup, hydrogenated oil and preservatives found in rival sugary treats.

“It’s amazing,” Dorsey says in the commercial. “It tastes just like you are four years old.”

Here’s the full spot:

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