1:02 pm: With lunch ended, attendees are filing back into the auditorium to Sly and the Family Stone’s “Thank You.” Dorsey should be on stage any minute now.

1:05 pm: Walt takes the stage, followed by Dorsey.

Walt: That’s the big lesson of AsiaD, everybody, that’s your big takeaway. So, let me just start by asking what might be a little bit of a personal question but you have a reputation for being very personally involved in wanting to make sure that the products are really well done for the users. Everybody says they do but not everybody does. But you do have that reputation. And for being a pretty serious guy about it. But you’re running two companies. How do you, tell me how you split your week or your day. How do you do this? And maybe explain a little bit. I think everybody knows what Twitter is. I’m not sure everyone knows what Square is and maybe you should for a minute explain that and then talk about what I asked.

Jack Dorsey: Okay, well Square is a, is a very simple little device. It plugs into your iPhone or your iPad or your Android device and it allows anyone to accept credit cards immediately wherever they are. We’re only in the U.S. right now but we’re looking to expand outside of the U.S. very soon. Square is about 200 people right now with contractors. We have about 170 full time. And both companies are within the three-block radius of my apartment so that makes things very, very easy, and you know, this is what I love doing. I love building, I love creating stuff, and we have fantastic teams at both companies, and it just makes it super easy. But one of the things I love about building products the most is just paying attention to the details. And I love simplifying something down to a base essence and taking something that’s very, very complex and trying to make it simple and focusing on every single pixel, every single interaction, every single, you know, help text script that we have because all of it adds up to a beautiful experience and that’s what we want to create is something that just feels magical. It feels so magical that it fades away. It just disappears in the background and you’re just using it, and you notice it when you notice it and that’s the best feeling.

Walt: Some of this terminology you’re using reminds me of Steve Jobs. Is there some connection there?

Jack Dorsey: Steve, like many of the people in this room and around the world, has definitely inspired me. He’s been a mentor from afar for as long as I can remember. You know, I’ve learned a lot from how he’s built that company. I think a lot of people learn from the surface of what he’s done with Apple. You know, the aesthetic, but what’s most fascinating to me about the company is the discipline it has, the practice it has. The amazing sort of collaboration each team has with each other. You don’t find that at a lot of companies, and at the end of the day how human the entire thing is. I think more than anything else Steve has taught me to be a better human and, you know, he really took his work to a very personal dimension and lived through it, and that’s amazing, that’s what, you know, we all want fulfilling jobs. We all want fulfilling careers and fulfilling work and he really, he lived it.

Walt: So this attention to detail, this wanting the thing to be magical and disappear. I’ve seen the Square hardware piece and it really, it really is a beautifully made thing for something that’s just a card swiper. You know, you could make it any way you wanted.

Jack Dorsey: Yeah.

Walt: But you seem to take a lot of care in it. I also use Twitter a lot, all day, and there I think you have a lot less control over, right? Because people are obviously — I don’t, and you can tell me the numbers, but you have a lot of people who go to the Web page but most of the people I know do not use the Web page as their way to use Twitter. They use either mobile apps, your app, or somebody else’s app, or they use the various desktop apps, TweetDeck or something else. And so if you want to, if you want to achieve a certain user experience and make it magical and make it right down to the pixel ,some of it is out of your control because they’re just using your APIs, right?

Jack Dorsey: Yeah, but you can still, you can still focus a lot of energy on the interaction. You know, it’s not just the pixels, it’s not just the interface. Twitter to me, you know, the magic about it is the constraints, the 140 characters, the fact that anyone can approach it, anyone in the world, and use it immediately. And they can use it to tweet, they can use it to share what’s going on in their life, but they can also use it to figure out what’s happening in the world. And you can instantly get a sense of everything from what your parents are doing and your friends are doing to also what’s unfolding in Egypt right now or what’s happening with, you know, the earthquake in Japan. It spans the human experience and in something that, you know, typically it would be very complex to get that sense immediately but Twitter delivers it instantly.

Walt: So, there isn’t so much the particular user interface like it would be with the Square system.

Jack Dorsey: Right.

Walt: It’s the experience.

Jack Dorsey: Yeah, that’s the most fascinating thing about Twitter to me is you ask 100 different people what Twitter is, you ask, you know, this room what is Twitter and you’ll get at least 100 different answers, if not more. And it’s equivalent to the world. If you ask this room or you ask 100 different people, you know, what is the world to you? You’ll get 100 different answers and probably many more. And the thing about it is it’s so simple, it’s so essential, and it’s so constrained, it’s such a utility that people can build whatever they want on top of it. It reflects, you know, what they want it to be, and in fact that’s really transpired in our development of the system. Before the user name, the hash tag before a word, the –

Walt: Hash tag AsiaD, by the way.

Jack Dorsey: Hash tag AsiaD, a little plug. To get into a conversation the concept of retweet, even the word tweet, these were all invented by the users. This did not come from the company. It did not come from me. It did not come from my co-founders or anyone in the company.

Walt: Really?

Jack Dorsey: These are behaviors that we noticed and we noticed there was a lot of friction around using them, so we can take that friction out and make it a part of the system, and some of you have ways to address people and organizations but also ways to address topics and what people are caring about, and then ways to re-broadcast information in real time which is the concept of retweet. So, I think the company and the product has been amazing at listening to what users are doing with the system and what they want to do, and building according to that.

Walt: Now since we’re in Asia let’s talk a little bit about that and Twitter, and then I want to talk about Square also, of course. Is Twitter a big deal in Asia?

Jack Dorsey: Yeah, you know, it’s awesome because we launched, we stared working on Twitter in 2006 and we launched it in 2007 officially, and we saw a massive amount of activity in Japan. And this was really, really surprising to us. We saw it immediately in 2007 and it led us to translate to Japanese in 2008, which was our first translation. But what was fascinating about it was people, it wasn’t just people using it. We had this, this weird occurrence around 7:00 pm in San Francisco, we would see, we had a public timeline which showed every single tweet that was happening in the public and we would see all of these little cat icons. And these cat icons had little Japanese names and then like pictograms and various things that we couldn’t read, and they kept happening at the specific time every single day in San Francisco. And we dug into it and we found that these cats were actually Tamagotchis, they were people’s pets and they were on Twitter, this was a program and people were following these Tamagotchis on Twitter and they were, you know, replying to them and direct messaging them and saying, you know, go to sleep and here is some food, and the cat would become happy, and it was fascinating.

Walt: And did the cat actually respond to the command?

Jack Dorsey: Oh yeah, yeah, the cats responded, and it’s like a typical Tamagotchi. So, it was a virtual pet –

Walt: Wow.

Jack Dorsey: — happening on Twitter that the entire world could see. It was a public conversation.

Walt: And you didn’t have an API for that or anything.

Jack Dorsey: We had an API, we didn’t have a Tamagotchi API, we’re still working on that one, but yeah, we had a general open API that anyone could again define what they wanted to see on the service, and you know, people wanted to see Tamagotchis, people wanted to take care of virtual cats.

Walt: And how about the rest of Asia? Once this got popular in Japan what happened?

Jack Dorsey: Yeah, so we saw a lot of spread to the Philippines, for instance. We saw a lot of activity in India, and it keeps, it keeps, you know, getting bigger and bigger. But Japan has been our largest market. We have an office in Japan now with a team of about five people, I believe, and they’re supporting and making sure that we tailor the application to the market and to the culture. And we have a, we have a sales effort there as well.

Walt: And China?

Jack Dorsey: China, you know, we have a lot of amazing people who want to use the service and are trying to access it in various ways, but it’s not easy to access in China, and it’s a policy against us.

Walt: Let me, let me switch for a minute to talking about identity on the Web and sort of social media competition. Do you guys aspire the way that Facebook and Google seem to be aspiring? Do you aspire to be the bearer of identity on the Web across a lot of sites and a lot of things? You know there’s something like Facebook Connect, Google obviously has designs on that. Eric Schmidt talked at some length about it at our conference this summer. What’s your, do you have a strategy there for getting my identity online?

Jack Dorsey: You know, we’re seeing, what’s interesting to me about Twitter is it’s not just online identity, people are using that online identity in offline ways. It’s the easiest way to transfer from an offline encounter to an ongoing online relationship. So, people put their user names on their business card. People are putting hash tags on billboards and TV shows, and when you actually type in that hash tag or you type in that user name you can find more about that person or about that organization –

Walt: I would remind you that people used to put their AOL IDs on bulletin boards and ads and business cards too.

Jack Dorsey: Yeah, but it was, it was a closed network. It wasn’t, it wasn’t –

Walt: I know what it was, I’m just saying.

Jack Dorsey: Yeah.

Walt: You know, somebody might have said well look, AOL is everywhere, you know?

Jack Dorsey: Yeah, no, it’s a good point. So, we need to make sure that that activity is easy, that you can easily encounter something that’s offline and then immediately translate it to an ongoing online relationship.

Walt: So QR codes and stuff like that can be used?

Jack Dorsey: People have been using that for Twitter to express a Twitter user name or to a hash tag and it’s something, you know, we just naturally support because you can, you can plug in at any time and, you know, we have clients for that.

Walt: But you know what I’m talking about when I talk about there’s kind of a war about identity or a competition, and I would say without knowing the numbers that clearly Facebook is sort of leading right now in terms of how does somebody express their social identity across games, across logins to different, even comment sections of Web sites that aren’t social beyond the fact that they’re comments. Are you going to be in that game? Are you in that game?

Jack Dorsey: I think we’re already, I think we’re already there. And the complexity around identity is as you said there’s multiple identity forms. You know, the credit card I have in my pocket is identity. I use that not only to pay but I use it to check into my flight, you know, that magnetic strip carries a lot of my identity right now and I use that in various ways. The mobile phone has identity. So, the question is how do we make it easy to merge those and where do you use that identity? Some people have a very different public identity than they have a private identity and that’s very important to them, and they want to persist it. So, it’s tricky. We want to make sure that we’re giving every option to the user and people have full control over expressing their identity to the world.

Walt: But I haven’t encountered many websites which say you can log in by typing a bunch of stuff or you can log in by clicking here and using Twitter credentials. You see it with Facebook credentials all the time.

Jack Dorsey: We do have those. What’s been most recent is iOS 5. So, the iOS 5 integration, it’s never been easier to integrate Twitter.

Walt: I noticed.

Jack Dorsey: You put in, yeah, you put in your Twitter identity –

Walt: I have it right here and I noticed.

Jack Dorsey: It’s amazing. You put it in once –

Walt: Or it’s in the back, yeah.

Jack Dorsey: — in settings and then any app can use it. So, I mean, I can’t think of a better and more frictionless, more effortless single sign-on than that experience, and that’s something we want to replicate.

Walt: But that was built in at the OS level by a deal you did in that case with Apple.

Jack Dorsey: Right.

Walt: Presumably you could do it with the other mobile operating systems.

Jack Dorsey: Absolutely.

Walt: But it’s not a, it’s a little bit different than Facebook Connect on the Web which is just, you know, any Web site can sort of just use it.

Jack Dorsey: Yeah, and we have, I mean we use open ID, we use OpenOff.

Walt: Okay.

Jack Dorsey: But the systems can get better and we need to make sure they’re better and they’re easier to use, especially on the Web. The Web is a little bit complicated. It’s much easier to do on mobile for us.

Walt: And I believe Dick Costolo said something yesterday or the day before about how the signups from that iOS 5 thing –

Jack Dorsey: Oh, it’s been amazing, tripled.

Walt: Tripled, and you had not expected it to be that dramatic in this short of time.

Jack Dorsey: No, I mean Apple has created this amazing way to produce content onto the platform. So, from the camera, from photos, from YouTube, from Maps, from Safari, you can instantly tweet. It’s breathtaking, and like, you know what was surprising, we thought that it would inspire a lot of activity and a lot of sharing but it’s actually inspired more signups, and we weren’t just, and we weren’t expecting it.

Walt: Yeah, that surprised me because I would have assumed there would have already been a pretty big overlap of people using iPhones.

Jack Dorsey: Yeah.

Walt: And people using Twitter. Wouldn’t you have assumed that? I mean I don’t know.

Jack Dorsey: Yeah, I mean we do have a high occurrence of iOS users on Twitter but these are, these are people getting their iOS device and signing up for Twitter, and I think there is, you know, some of it’s the prominence within, you know, the settings app but a lot of it is just, you know, when people hear Twitter the hardest thing is just to get started. And if you make it easy to get started then people will take to it right away.

Walt: Yeah, because you don’t have to go to a Web page.

Jack Dorsey: Exactly, it’s all right there.

Walt: You don’t have to know oh, I need to download this app, this Twitter client and that will let me sign up.

Jack Dorsey: It’s all right there.

Walt: You know, it’s just right there in the, in the OS.

Jack Dorsey: Absolutely, yeah.

Walt: So, are you going to try to follow that pattern with Windows phone and BlackBerry and Android and whatever else you –

Jack Dorsey: We’re open to replicating that to every platform.

Walt: Okay, what about, this is, this is an important question I think for really all parts of the world but certainly here in Asia. There are lots, large populations of people that can’t afford iPhones, they can’t afford that cool new Android phone that Andy Rubin had here last night. They can’t afford the Windows phone we saw today. What are you doing for those people? How are you, how are you planning to broaden it out?

Jack Dorsey: First and foremost Twitter was developed so that it could degrade gracefully to every single device. So, Twitter works on every single device out there today.

Walt: Through SMS.

Jack Dorsey: Through SMS. You know, so we, the 140-character constraint actually came because of SMS. SMS was constrained to 160 characters early on.

Walt: Why did you knock the other 20 off?

Jack Dorsey: We reserved 20 characters for the user name so that when you get a message you can see who is tweeting.

Walt: Okay.

Jack Dorsey: So, we’ve always had an ability to reach any single device. But SMS isn’t always the best experience for everyone, and you know, there’s a lot more feature phones in the world and mobile Web browsers on these feature phones and, you know, they’re not as advanced as, you know, what an iPhone has with Mobile Safari or Android or BlackBerry, but people use them all the time. And the question is how do we make them, how do we encourage them to use it for free and how do we make that experience free so that they can immediately get into it? And one of the things that we’re really excited to announce is that we’re working with Airtel in India to enable people to access Twitter for free over these feature phones.

Walt: With an app?

Jack Dorsey: With, with the mobile Web, with the mobile Web.

Walt: Oh, with the mobile Web, okay.

Jack Dorsey: Yep, so the tools they already have in their pocket, they can, they can access it with for free, and you know, it’s going to be kicking off pretty soon but we’re really excited to work with Airtel. Airtel is the first –

Walt: And is this a pattern you hope to repeat in other countries?

Jack Dorsey: Yes, yes we’d like to go all over the world with it, yeah.

Walt: But it’s really pretty important, particularly in parts of Asia, right?

Jack Dorsey: Yes.

Walt: Where you have large –

Jack Dorsey: Especially, especially India. I mean it’s such a fascinating culture around mobile and particularly around social. It’s a very, very social culture.

Walt: So, how much of India do you get, forgive my ignorance, but how much of India do you get with Airtel?

Jack Dorsey: I believe we get the majority of it. I have to look up the numbers but I mean they’re all over the country.

Walt: One more Twitter question. You recently lost your CTO. Is there trouble in paradise? What’s going on there?

Jack Dorsey: There’s no trouble –

Walt: Why would anyone quit Twitter?

Jack Dorsey: There’s no trouble in paradise. So, we actually just parted ways with our VP of engineering, not our CTO.

Walt: I’m sorry about that.

Jack Dorsey: Mike Abbott. And you know, Mike, Mike did a fantastic job really building up the organization. He built up the engineering organization from about, you know, something like 75 people to over 300. And came in and focused on, you know, we had a lot of engineering challenges early on. We were going down a lot, people were seeing this thing we call the fail whale.

Walt: Yep.

Jack Dorsey: We’ve significantly reduced the number of impressions with fail whale and we hope to keep it at bay forever more. But of course you know, we’re building a worldwide global utility so, you know, we are going to have failures in the future but we’re going to minimize them.

Walt: There’s your headline. There’s your headline.

Jack Dorsey:There’s your headline.

Walt: Predicts failure. Okay, sorry, just translating for the journalists out there, you know.

Jack Dorsey: Thank you so much.

Walt: Yeah, I try.

Jack Dorsey: You know, this is, this is, it’s just a reality, it’s an engineering challenge, and I think Twitter is unique in the world in that like, you know, we are building a true utility and it’s –

Walt: So, why did he leave?

Jack Dorsey: Well, we –

Walt: Why, if he, if it’s such a great place and trying to do such a great, have such a great mission and it’s obviously very popular, everybody here is tweeting, and he was able to build this big organization, what happened?

Jack Dorsey: With every company there’s stages of the company, you know, some people are great at the early stages, some people are great at the middle stages, and some people are great at the later stages and you know, Mike is someone who is extremely entrepreneurial and has just, and does an amazing job with us with, you know, I think right now we need to focus on all of the opportunities that we have to build now that he’s, you know, with a team solved all of the engineering challenges.

Walt: Okay. Let’s switch to Square for a minute. How well, how many merchants do you now have, and these are mostly small merchants I think, right?

Jack Dorsey: These are small merchants in the United States.

Walt: Who can take an iPhone and your Square device and of course your software and your, and your service and suddenly accept credit cards when they couldn’t before. How many do you have?

Jack Dorsey: We’re almost to the day a year out, a year out on the market and we have 800,000 merchants using Square. We’re process –

Walt: Out of how many, what’s the potential audience in the U.S. for this kind of a product?

Jack Dorsey: Well, just for small businesses there’s over 27 million small businesses that don’t accept credit cards in the United States today. So, it’s a huge market. We’re processing 8 million dollars a day in the United States which is about a two-billion-dollar annualized run rate. So, it’s growing extremely fast. It’s been very, very surprising. We’re growing the company to match, you know, the adoption so we’re, we’re nearly 200 people right now and I think in fact we’re just over 200 people. They’re all in San Francisco. But we’ve just seen massive uptake from the individual. You know, we built it for sole proprietors and individuals to start accepting credit cards because it’s just way too challenging to do that, to get –

Walt: So someone who sells her pottery somewhere or –

Jack Dorsey: Like yeah, pottery or like a personal trainer or a golf instructor or, you know, a babysitter, or dog walker. You know, you name it and you’re selling something on Craigslist. Any time you need to receive funds as an individual this is a great solution but –

Walt: Is America the only country in the world that has professional dog walkers? I wonder about that.

Jack Dorsey: I’m sure England has a number of them.

Walt: Okay, good, thank goodness for that.

Jack Dorsey: Yeah.

Walt: Okay.

Jack Dorsey: But, you know, we saw more and more people move to more substantial businesses. So, we saw food trucks, we saw flower carts, you know, we saw –

Walt: Right, I’ll tell you the food trucks near my office in D.C. use it.

Jack Dorsey: Yeah, Pi Pizzeria.

Walt: They do.

Jack Dorsey: Right in D.C.

Walt: Yeah.

Jack Dorsey: Yeah, they’re from St. Louis.

Walt: Your home town.

Jack Dorsey: My hometown and the World Series, I’m very proud of it.

Walt: Go Cardinals.

Jack Dorsey: And we won today, we won today.

Walt: Go Cardinals.

Jack Dorsey: So, but we saw more and more substantial businesses and people were using it on the counter. So, when the iPad came out we decided to build a full point of sale system, not just accept credit cards but accept cash and, you know, account for cash transactions and have, you know, items on the iPads because we had all of this amazing screen real estate.

Walt: Like can these kind of small people, small business people afford iPads? Or is it compared to what? I mean how does it –

Jack Dorsey: Yeah, that’s exactly it. So, you know, they’re buying iPads anyway. In fact most of them have iPads because they want a general purpose computer. They’re not buying a laptop and they’re buying, you know, a $499 device and, you know, in the case of a lot of small businesses we’re seeing they also want network, you know, network connectivity so they’re paying $629 to get an iPad with a Verizon or AT&T modem in it and the beautiful thing about that is there’s no contract with either one of the carriers.

Walt: Right.

Jack Dorsey: So they pay $14 a month and they have Internet in their shop. And not only do they have Internet and a, you know, a general purpose computer but they have a full point of sales systems. So, they can do everything they want and they don’t have to buy anything else. They don’t have to buy DSL, they don’t have to buy a cable modem, they don’t have to buy a phone line for the business, they don’t have to buy a credit card terminal anymore. They don’t have to –

Walt: But what does a credit card terminal cost a business like that?

Jack Dorsey: A credit card terminal, well these things are complicated so I’ll subsidize through, you know, what you have to pay later. But generally it’s around $100 to $900. So, if you want something that’s mobile that works on the, on the cell system it’s $900.

Walt: Okay, so the iPad is actually cheaper in the end.

Jack Dorsey: It’s cheaper.

Walt: Yeah.

Jack Dorsey: I mean when you add it all up it’s a significant discount to what you’re doing and you can do more with it, that’s the most amazing thing about it.

Walt: So, you’re doing something that I find interesting. It’s not brand new but you haven’t talked a lot about it. Some people in the room may know about it but maybe not everybody. It’s called CardCase.

Jack Dorsey: Uh huh.

Walt: And it’s the other end of the transaction. It’s for the customer but it interacts with Square. Can you explain what that is and how it works?

Jack Dorsey: Yeah, this is, this is one of the most exciting things for me. You know, early, early this year we had three goals for the company, we put before the company. One was to build the definitive point of sale, to build a point of sale that really accounted for a number of things that people normally do with point-of-sale systems. And you have to realize all of these point-of-sale systems are extremely ugly and they’re just, they’re useless at the end of the day.

Walt: I’ve seen them, yeah.

Jack Dorsey: Yeah, you have to encounter them. It’s a compromise that every small merchant has to go through. Number two was to get the company ready to go outside the United States, and we’re on track to do that so we’re going to be expanding outside of the United States early next year. And number three was to make the receipt an application, to make the receipt more actionable. When you think about it the receipt is something that people give over every single day, and the first thing that people do with it is throw it away. It’s just useless. You give it to your account department for expenses.

Walt: Even if it’s digital, I mean –

Jack Dorsey: Yeah.

Walt: When I got to Hong Kong I needed a new set of ear buds so I went to the, this big new Apple store and, you know, how they have a thing where they just email you the receipt.

Jack Dorsey: Yep.

Walt: And so I have it, I got it in my email but I can’t do anything with it except save it –

Jack Dorsey: You can’t do anything with it. You can’t click on it, you know, it’s a pdf.

Walt: No, it’s a pdf.

Jack Dorsey: So, you can’t interact with it.

Walt: It feels very advanced compared to other stores that don’t, that are just paper, but it’s still kind of a dead thing.

Jack Dorsey: Exactly, it can be so much better. I mean, one iteration is just to make it a Web page, and to make it so that you can interact with it, so you know the hours of the merchant you just went to, you know how many times you’ve been there.

Walt: But you’ve done something even different in CardCase.

Jack Dorsey: Yeah.

Walt: Explain what it is.

Jack Dorsey: So, the team, the team created this application which is something you can download right now on the app store, and what it –

Walt: It’s an iPhone app.

Jack Dorsey: It’s an iPhone app and Android, it’s on Android as well.

Walt: And Android, okay.

Jack Dorsey: And what it allows you to do is once you get that receipt you can download a card for the merchant. So, you can open this app up and you can explore all of the merchants nearby so you can see the food trucks nearby you immediately in D.C., and then you take that card and you can flip it over and you can see their full menu. We’re building a point-of-sale system so people are putting their entire inventory into our point-of-sale system so we can actually broadcast the menu in real time which is amazing. So, whenever they have a special, whenever they take something off the menu or add to it we can push it right there into the payer’s pocket, which is great.

Walt: So, I have it. It kind of looks like a wallet and I have different cards.

Jack Dorsey: Yeah, you have these cards and you link a credit card to it so that when you go to the merchant you can actually, you know, when you’re within 500 feet you can take this card out and you can hit Open Tab, so you can open a tab at any merchant just like you would a bar, put the phone in your pocket, walk up to the counter, and say I would love a cappuccino and put it on Walt. And they find your name on the cash register, find your picture, and they –

Walt: On the iPad.

Jack Dorsey: On the iPad and they, and they choose you and then it charges your card in the background and you get –

Walt: And I don’t even have the phone in my hand.

Jack Dorsey: You don’t have the phone in your hand. So, it’s all in your pocket. And then you get a push notification saying you just paid Sight Glass Coffee $3.00, would you like to tip them? So, you can walk away at any point and open the app up and give them a tip which gives them a lot more tips. That’s the same thing that happened with New York City and the taxi cabs getting, you know, credit cards in the back. But the most important thing is the merchant knows who you are. They know that, you know, you’re Walt and you had a –

Walt: What if I don’t want the merchant to know I walked into their store?

Jack Dorsey: You can, you don’t have to use it. I mean you just don’t have to select open tab.

Walt: So, unless I select the tab they don’t know.

Jack Dorsey: Yep, yep, yep.

Walt: Yeah.

Jack Dorsey: Yeah, you just use your credit card in that case or cash. But we think it’s, we think it’s interesting to, you know, know your customer.

Walt: But it only works with merchants that are using Square.

Jack Dorsey: Only with merchants that are using Square.

Walt: And your Square whole system and all that.

Jack Dorsey: Yep, so we have 20,000 merchants around the country using it today who turned it on. We kind of rolled this out in a very, you know, word of mouth way. We didn’t have a big announcement. We launched it and we constrained it for awhile because we are a payments company so we have to make sure that we’re watching everything and that everything looks good, and people are using it in the right way and all of the security checks are in place and we continue to roll it out bigger and bigger and bigger and more and more, and we’re really excited about developing it and we have some interesting new features coming out.

Walt: So, there’s all kinds of different mobile payment systems, obviously Google is relying on NFC, there’s a lot of that already in Asia, but for us in the U.S. Google is kind of trying to push that and they have arrangements with Citi MasterCard and with some other, some other people and some loyalty cards and, you know, they’re trying to do offers. There’s a million, it seems like there’s one every two weeks. Are they all going to stay in business? Is somebody going to go out of business? How is this going to coalesce in the U.S.?

Jack Dorsey: Well, the thing about –

Walt: Are you going to be victorious? I mean, what’s going to happen here?

Jack Dorsey: The thing about, the thing about payments is it’s a very, very large industry so there’s a lot of room. A lot of the folks that you mentioned, they’re going after very specific things. You know, they’re building credit card terminals, they’re focused on technologies, they’re focused on, you know, just building a point-of-sale. Square is the only one that’s focused on the entire ecosystem, from one end of the counter to the other end. And we want to build both, we want to build the entire stack and we think the true, the true power we can bring is building that entire stack allows for a magical experience, allows for something that is seamless. And that’s what we believe payments needs. It needs to fade into the background. Right now it’s focused on mechanics, it’s focused on digging out cash or digging out a card or waving your phone around in the air at a, at a terminal and we just don’t think that’s the best experience. We want something that feels natural. I want something that I can walk into a coffee store, I can order a cappuccino, I can enjoy it, and I can walk out wondering if I paid for it or not. You know, that’s the magic.

Walt: Wondering if I paid for it.

Jack Dorsey: Wondering if I paid for it or not. Like that’s the magic iTunes has brought with one-click purchasing and Amazon has brought with one-click because that you’re not concerned about the payment mechanics, you’re concerned about what you’re buying and how much it is.

Walt: And of course for the point of view of the merchant and those two are good examples, it really increases impulse buying.

Jack Dorsey: Yes, absolutely.

Walt: If you tell me, “Walt, I heard this song or I read this book,” I can go to Amazon or iTunes and I don’t have to go through any shopping carts or anything, I just click a thing and boom I’ve got it.

Jack Dorsey: Yeah, and it gives, it gives the user more information.

Walt: It downloads it right to my device and my Kindle, or my whatever my iTunes device is.

Jack Dorsey: Yeah, and ideally it’s not, you know, with more data it’s not just impulse, it’s enabling you to buy what you really want and focus on what you really want instead of just, you know, buying randomly encouraging bad behavior.

Walt: I want to ask you one last question before we go to the audience if they can stop tweeting and think about what to ask the guy from Twitter. But my last question is this, one day I was talking to Steve Jobs. At the time, he was CEO of both Apple and Pixar, which was at the time and, I mean it was the most successful studio in Hollywood in terms of turning out giant hits. And I said how can you be the CEO of Apple and Pixar both? I mean, you know, these are kind of complicated things. And he said well, I do Pixar on Friday. I do Apple the other days. And I said well how can you do that, and he said Pixar has a long product cycle, it takes a long time to do one of these movies, Apple has a shorter product cycle and so I can manage to mix it up. As we know, he eventually sold Pixar, but how do you split your time? It’s nice that it’s all within three blocks of your apartment but is there a cadence to how you split your time between Twitter and Square?

Jack Dorsey: Absolutely, I mean first, first of all I have a benefit in that I’m not the CEO of both companies. I’m only CEO of Square. Dick is our CEO of Twitter.

Walt: I understand.

Jack Dorsey: I’m Executive Chairman and, you know, I help with the product teams and making sure that we’re launching the most delightful experience and we’re building that function up. But I put a lot of, you know, the biggest thing I learned from Steve and Apple is the discipline, is the practice, and they were amazing, they are amazing at it. So, I have tried to put a lot of discipline in how I spend time and how I think about, you know, both companies.

Walt: So how do you do it? How do you, what is that discipline and what is the result of that discipline?

Jack Dorsey: So like one of the practices is I’ve been, you know, theming my days. So, Monday is about, is about management so I focus a lot on management problems. Tuesday is about product. So, I focus a lot of energy on product and arrange all of my product meetings on Tuesday. Wednesday is about growth and –

Walt: At both companies? You do this at both companies?

Jack Dorsey: Yeah, yeah.

Walt: Alright.

Jack Dorsey: Growth and marketing and Thursday is about partnerships and developers, and Friday is about the company and the culture, Saturday I take off, and then Sunday is feedback and getting ready for the week. And it’s, I’ve been doing that for about six months and, you know, it’s working out pretty well. There’s always interruptions but it’s just having that frame of reference and making sure that we’re constantly going through a cadence that makes sense not just for me but for the entire company. And I think we’ve achieved something that works.

Walt: That’s really, really interesting. Well, thank you so much. Thank you very much.

Jack Dorsey: Thank you.

Moving on to the audience Q&A

Jack Dorsey: And that’s why I wear them.

Q: Yes, so two questions. One is how do you go about future proofing Square? You’ve got chip and PIN coming into the credit cards today and secondly the other Jack, Jack Ma mentioned, you know, a lot about partnering. So, you know, so you know, as a bank employee what are the opportunities for the, for the banks to be partnering with Square? Thank you.

Jack Dorsey: They’re both great questions. The first in terms of future proofing Square, I mean, the biggest thing that any company has to do is just constantly innovate and constantly collaborate and always be ahead of the market and with something like CardCase we think we’re transcending the technology because it is all software. It’s more of an experience than anything else. There are markets that we have to pay attention to and, you know, the hardware they’re using. For instance, you know, Canada and all of Western Europe use chip and PIN. It’s not a requirement that we use chip and PIN. It makes the transactions cheaper for us. But it’s not something that we absolutely have to do. It’s something of course we want to do and we’ll have to build hardware in order to do that, but we get to make that choice. But at the end of the day we want to make sure that we’re constantly innovating and always ahead of, you know, where the market is going and we think, we think we’re making those moves.

In terms of partnerships, every single market that we get into we need to have partnerships with local banks, with you know, with the local distribution points. We have amazing lift in the United States from our retail distribution points. We’re in every Best Buy, we’re in every Apple store in the United States and people go by and they can pick up a Square for $10. We will look, you know, in a similar fashion to banks to be a point where people can immediately not just open a bank account but open a way to accept credit cards, you know, instantly. And banks are a natural place for people to go do that.

Walt: So, the bank would actually give the person a Square?

Jack Dorsey: The bank would give you a whole business in a box, basically. You know, you can, I can open my business checking account and, you know, here is a, here is a free device to start accepting credit cards so you can actually participate in this electronic economy.

Walt: So where they once gave away toasters they can give away Squares.

Jack Dorsey: Much more useful.

Walt: Okay, not for toasting though.

Jack Dorsey: No.

Walt: Squares don’t toast anything.

Jack Dorsey: Not that I know of.

Q: Hi Jack, Richard Lange [phonetic] from Lange Gadgets. So, two questions but first of all like you said earlier in order to access the Twitter service in mainland China people have to climb over the great firewall which is obviously a huge advantage to the weibo services. So I just want to see if you can share some thoughts on these Chinese microblogging services. And secondly, will we ever see a China-compliant service from Twitter, especially given the tight integration in iOS and obviously with Apple naming China the second most important market nowadays.

Jack Dorsey: They’re great questions and I think for both of them, you know, the unfortunate fact is that we’re just not allowed to compete in this market, and you know, that’s not us, that’s not up to us to change. We need to, you know, the person to ask is, you know, trade experts between both governments. But, you know, at the end of the day we just can’t, we can’t compete. They can compete in our markets and, you know, we’re certainly, we’re certainly interested in what that means for us. But, you know, I’ve looked at weibo and it looks fascinating. The ways that people are using it are amazing and, you know, you’re seeing more and more activity, and we would love, we would love to have a strong Twitter in China but we need to, we need to be allowed to do that.

Q: I’m a securities analyst who looks at all of these different companies and tries to figure out business models. I kind of understand listening to you about Square, but Twitter, how are you going to monetize it longer term and is it a viable business model? Because I can imagine the expenses involved are huge to develop a Twitter but the monetization at this point is much more questionable in my mind.

Jack Dorsey: Oh, so the revenue products that we have today have just done an amazing job. We have, we have promoted tweets, we have promoting trends, we have promoted accounts. They have gone above and beyond in terms of our expectations, both in engagement and also how people are using it. Eighty percent of our advertisers are coming back and using promoted products again. So, it’s a pretty strong sign that it’s working and it’s working in the market. But this is something we’re always looking at. It’s not just a question of, you know, how these products are doing it but how are users engaging with it? And we’re actually seeing more engagement with the promoted products because they’re there. And this is similar to when Google launched AdWords, they were seeing better search results with AdWords online. So, there’s an opportunity as long as the content is relevant and it feels like it should be there and it feels like it’s something that is additive to my experience, it will persist forever more, and we’re looking at ways not just with the revenue products but all of our content to always make it more instantly relevant across every single platform, the Web, and mobile, you know, as it matters. The most critical thing about Twitter and the thing that we have, you know, a massive advantage in is how real time the service is. And you know, the promoted products have been great in terms of bringing a real-time introduction to something that people would have not otherwise known about.

Walt: You can sell those socks, in other words, as a promoted product.

Jack Dorsey: We probably have already.

Q: So, is Twitter profitable and generating free cash flow at this point?

Jack Dorsey: One of the benefits of being a private company is we don’t have to talk about that, as you know.

Q: Hi Jack, my name is JOA [phonetic] of JOA.com. I’m an independent social media consultant. Really glad to hear about your focus on products. We have seen a lot of Twitter expansion catering to try and bring in a lot of new people, keeping it simple for the beginners. But also power users are the core of Twitter. They carry on that short head so much of the influence of power that we see on Twitter. Tools like you bought recently, TweetDeck, lots of concern over this being, you know, power user, social media suite. What’s going to happen? Are we going to see new innovation or are you looking at shutting this thing down?

Jack Dorsey: Well, we’re always looking at more innovation. We’re not, we’re not going to shut it down. You know, you bring up a good point which is, you know, we’ve had, we’ve been in a very fortunate situation in that power users have really pushed the service dramatically and really helped us to find the service and we, you know, we have a lot of appreciation and gratitude for that. But the biggest thing that we need to do is make Twitter simple and to make it approachable. There are over, you know, I think the UN is just about to announce, I just became very loud.

Walt: You did, yeah.

Jack Dorsey: I better get this right. That there is a, there is about to be seven billion people in the world, seven billion people. And we want to build a service that is immediately approachable and accessible and usable by each and every one of them.

Walt: Well, some of them are 6 months olds so, you know, or 1 day old or something.

Jack Dorsey: They’ll grow up. So to your point, we need to make this simple. We need to take everything that we did, that we have in the world, and really enable people to immediately get a sense of what Twitter is and what it means most importantly for them. Why is Twitter important for me? Why Twitter? And we can answer that question but it has to be an individual answer to our conversation earlier. It’s different for everyone and everyone is going to find something, everyone is going to find something meaningful on it but we just need to be really good at surfacing that immediately based on whatever signal that we have.

Q: You have not forgotten about the power users, though.

Jack Dorsey: Absolutely not, no, they’re a huge base for us and something that really drives not just the service but the community and the phenomenon around Twitter.

Q: If I can follow up with one more question? In Hong Kong we’ve got a real split culture where weibo has been taking a lot of the Twitter users because the celebrities are there, they’re not, they’re not on Twitter here. And because of that we’re seeing the community split in microblogging here. If you could maybe speak towards sort of the freedom and democracy models of Twitter and maybe help convince some of our local audience who is on this side of the firewall not to, to move over to weibo?

Jack Dorsey: The biggest thing for us is we want to build a service that people can communicate freely on no matter where they are in the world, no matter what they’re doing with their lives that they can use this service and pick it up immediately and communicate to the entire world, and the entire world can engage with them. And that is the most important thing for us to uphold and the most important thing for us to defend, and we will always do that. And we’ll always look for opportunities to make it better in specific markets. So, we have a lot to learn here in Hong Kong and here in Asia, and we intend to do just that to make it more approachable.

Jack Dorsey Session Photos

At eBay’s developer conference, kicking off Wednesday in San Francisco, more than 4,000 developers and merchants will receive a preview of X.commerce, the company’s new technology platform aimed at developers.

The nonconsumer-focused platform will enable developers to use the tools to build applications for retailers who are looking to have a larger presence on social networks, online and on mobile phones.

Also on stage will be some of eBay’s new partners, including Omniture, Adobe’s marketing and advertising unit, and Katie Mitic, the director of platform and mobile marketing at Facebook.

Mitic, who recently joined eBay’s board, is expected to announce a partnership between the social network and eBay.

The X.commerce division will draw from many of eBay’s existing technologies, including PayPal, but will also tie together several other acquisitions, including Milo, which has created an online database of offline inventory in physical stores; Red Laser, which is a barcode scanning technology; and Magento, which assists in the creation of online storefronts.

In essence, eBay is looking to partner with physical retailers to generate more sales online or by driving more foot traffic to their stores.

That’s in steep contrast to Amazon, which has increasingly focused on driving more and more spending online. It also has focused on the digital distribution of content, such as books, music and video, and is placing a huge bet on hardware, like the upcoming Kindle Fire, hoping to rival Apple’s iPad.

The opportunity still exists for many to grab even just a small percentage of local commerce — regardless of whether it’s through third-party developers or driving more spending online. That’s because e-commerce today makes up only a small fraction of spending, with the bulk of purchases continuing to occur at physical retail locations.

The X.commerce group in eBay joins three other major groups, including the eBay marketplace, PayPal and GSI, which it acquired earlier this year.

X.commerce is eBay’s biggest move to date in becoming a back-end technology provider rather than a consumer-facing brand. The service it builds will be aimed at developers, who will in turn own the relationship with the merchants.

Take eBay’s Red Laser technology as an example. If a merchant creates an application using the technology, a consumer will be able to scan a barcode in the store, and then find out if the item is in stock. The consumer will then have the option of buying it using PayPal directly on the phone without ever leaving the application.

The most consumer-facing element being unveiled tomorrow is what eBay is calling PayPal Access, which will enable online shoppers to log in to a Web site to buy something using their PayPal account, rather than having to create a brand-new account. By using PayPal, the consumer’s shipping address and billing information will automatically populate the store, saving a few tedious steps. PayPal Access will become available to consumers as online merchants adopt it.

Last week, it made its first inroads after launching a pilot with T-Mobile USA that breaks the conventional revenue-sharing agreement first established by Apple.

Currently, a developer’s cut on Apple’s App Store, and most every other platform, is 70 percent. Apple — or in the case of Android, Google — gets the rest.

“We don’t agree on the concept of the 70-30 split,” said Julien Fourgeaud of Rovio, who wears a one-of-a-kind green pig hooded sweatshirt and holds the title of “bad piggy bank manager and magician.”

The arrangement “will not help drive the industry forward. It has so far, but it will have to change,” he added.

Fourgeaud would not say what rabbit he pulled out of his hat, but that the split was “better” than today’s standard. “Our goal is to drive it globally,” he said.

T-Mobile customers playing Angry Birds now will be able to purchase the Mighty Eagle for $1 and apply it to their carrier bill. See the video below for an explanation of what the Mighty Eagle is, but essentially it swoops in to help you when you’ve gotten stuck at a particular level.

It is the first time that carrier billing has been implemented by Rovio, even though it has previously announced deals with others.

Up until now, Rovio had been giving away the game for free on Android and monetizing it using advertising. And until now, Android users were not able to purchase the Mighty Eagle, and all of those not on T-Mobile still won’t be able to.

Rovio is an exception on Android. Other game developers are using Google’s own Checkout to charge for games, or are working with other third parties to enable carrier billing. Google is also signing up partnerships with carriers to enable charges to more seamlessly appear on monthly bills.

However, Fourgeaud says it’s unclear how many Android users have signed up for Checkout, which makes it difficult to justify implementing. That compares to Apple’s iPhone customers, who are required to input a credit card number when signing up for iTunes.

“I’m still looking for those numbers,” he said. “Google has a strategy that is taking more time to implement.”

Rovio’s next step will be to leverage the cost savings it was able to negotiate and create a payments platform that other mobile developers can use. The Bad Piggy Bank, as it is called, will handle in-app transactions using carrier billing.

Still, even with carrier billing, T-Mobile customers will have to take a few steps to play the version of Angry Birds with the Mighty Eagle. The quickest way is by texting “BIRDS” to 6255 to receive a link with instructions.

While they are usually much less voluble than the chatty Web execs of Silicon Valley, the execs who run China’s fast-growing Internet companies seem to be keeping up just fine of late.

On Friday, for example, the Alibaba Group’s Jack Ma was positively effusive about wanting to buy all of Yahoo, a company which actually owns 40 percent of Alibaba. “We are very, very interested,” said Ma at an event at Stanford University.

Now, in an interview with Bloomberg, Renren CEO Joe Chen decided to take a smack at Ma over his disputed spinoff of its Alipay payments unit, which caused a high-profile ruckus with Yahoo earlier this year.

“It’s quite unfortunate,” Chen said to Bloomberg about disagreement, which has since been settled. “It caused a lot of uncertainty about Chinese Internet companies.”

Them’s fightin’ words, and a source close to Alibaba reacted with, well, reaction.

“Yeah, it shook confidence so badly that Silver Lake and DST [Global] just decided to put in billions to back Jack Ma,” referring to a recent funding deal by the large investors. “People shouldn’t try to blame their own lack of performance on others.”

Ouch!

Actually, Renren has bigger problems than Alibaba.

According to a substantive report in The Wall Street Journal yesterday, what’s really hurting Chinese Internet companies is the declining stocks caused by recent accounting scandals there, which may have attracted scrutiny from U.S. regulators.

Wrote the Journal: “A series of alleged accounting frauds this year at little-known Chinese companies listed in the U.S. has triggered a sharp shift in sentiment among investors, who are now worried about hidden business risks or financial problems.”

Hence possible investigations by the Securities and Exchange Commission that will surely drag Chinese stocks on U.S. exchanges down more.

And indeed, the stock of Renren — which had its own controversial issue with accurate data reporting at the time of the IPO of the social networking site earlier this year — declined 13 percent Friday, along with other Chinese companies listed here.

Silicon Valley’s Silver Lake and DST Global of Russia, as well as Chinese private equity firm Yunfeng Capital, are leading a $1.6 billion tender offer for privately held employee and shareholder stock of China’s Alibaba Group, according to sources close to the situation.

Yunfeng, by the way, was co-founded by Alibaba Chairman and CEO Jack Ma, as well as other prominent Chinese entrepreneurs.

Along with DST, Silver Lake and Yunfeng, Singapore-based investment firm Temasek is also participating in the tender offer as an investor, but in a smaller way.

The deal, which has been discussed for some time, was signed earlier today and will be presented to its employees in an internal company blog, which will be in Chinese.

To get around persistent foreign ownership issues in China, sources said, DST and Silver Lake are ceding voting control of their stakes to Alibaba management.

If the tender is fully subscribed, that would mean a stake of just under five percent for the group, sources said, and it gives Alibaba a $32 billion enterprise valuation.

The impetus for the tender offer, which begins today, appears to be trying to address a cash-out, paper-rich issue for Alibaba employees.

There are no active secondary private markets in China, as is the case for tech start-ups in the U.S., and there is also no IPO in the foreseeable future for Alibaba. Thus, management has been looking for a way to give its employees and also other shareholders some liquidity.

This tender offer is not a capital raise by Alibaba and is only aimed at eligible employees and shareholders. The purchase of the Alibaba shares is expected to close before the end of December.

It will be done via a special investment vehicle, specifically aimed at this purchase, that includes a spate of investors. Giant Interactive Group, a Chinese online game developer, for example, said it had committed $50 million to the fund.

It’s not clear what the implications are for Alibaba’s biggest shareholder, Yahoo, which sources said is not selling shares in the tender offer. Yahoo’s fully diluted Alibaba 39 percent stake is now worth $12.5 billion in the deal.

That’s discounted due to tax issues and also the inability of the Silicon Valley Internet giant to sell its Alibaba shares.

In other words, investors will likely welcome this higher valuation, but realize a public offering is farther away than ever.

But it is interesting in that it clearly shows a strong relationship between DST and Silver Lake, which have jointly been mulling a possible bid for Yahoo along with Silicon Valley venture firm Andreessen Horowitz, as I previously reported.

Some will speculate that Silver Lake and DST now have an in with Alibaba, which is important, since a large slug of Yahoo’s market valuation is due to its Alibaba and also Yahoo Japan! assets.

If Yahoo is sold, of course, the disposition of the Alibaba asset is an important part of the deal.

More to come, including the implications for Ma, who has been under siege of late around his spinning out of Alibaba’s Alipay payments service and the noisy battle that later ensued with Yahoo. Yahoo and Alibaba, as well as its other large shareholder, Japan’s SoftBank, settled that dispute earlier this summer.

His involvement in Yunfeng, which is buying the company’s shares in a special fund that Ma is not in, will likely attract some scrutiny, anyway.

Sources said Ma is a minority investor in Yunfeng itself, has no control rights and is not a director. In addition, Yunfeng has no relationship with Alibaba.

In another interesting twist, Alibaba rival Tencent has close ties with DST’s Internet affiliate that used to share the same name, having invested $300 million last year in the affiliate that holds major Russian Internet properties.

Enter Google Wallet, the search engine’s answer to this problem. This mobile app uses a chip in the phone so it can be waved in front of payment stations to buy things. Users set it up by registering a credit card to the phone or loading a Google Prepaid Card with a credit card. A four-digit password enables payment transactions. Google Wallet is rolling out this week to Sprint’s already available, $50 (after $50 mail-in rebate and with a two-year contract) Nexus S 4G phones by way of an Android operating-system software update.

A phone with Google Wallet and a payment terminal.

I’ve been trying Google Wallet in Washington, D.C., and Palo Alto, Calif., and I find it delightfully easy to use. Though still in its infancy, it isn’t hard to imagine digital payments catching on and becoming commonplace. But there are plenty of caveats.

Google Wallet works only with phones with an NFC (near field communication) chip, which allows secure digital transactions over a short distance. In Japan, millions of cellphone users have been using mobile wallets with NFC chips, but the technology has been slow to catch on in other countries. For now, the Nexus S 4G is the only phone in the U.S. that works with Google Wallet, though more phones are expected soon.

Paying with Google Wallet is possible only at stores that offer MasterCard PayPass. In Washington, D.C., near my office and home, these included Sunoco, McDonald’s, CVS and Papyrus; other stores include Home Depot, 7-Eleven, Best Buy and OfficeMax. A MasterCard PayPass finder is built into the app and displays nearby locations where PayPass works. These can be viewed on a map, in a list or filtered by category. For now, only 150,000 merchants have the equipment in stores to use PayPass.

Citi MasterCard is currently the only credit card that can be directly added to Google Wallet, but the Google Prepaid Card can be loaded with other credit cards. Google said it will also work with Visa, American Express and Discover cards, but couldn’t say when.

Several other companies are planning their own digital-payment solutions. Last week, PayPal said it would launch pilot programs at the end of this year for a cloud wallet, usable by entering a phone number and a PIN at the register. Square has launched Square Card Case, a free app available on Android and iPhone that works on the idea of paying with virtual tabs, like starting a tab at a bar. Both ideas from PayPal and Square would avoid the need for phones with NFC chips.

Next month, Google Wallet will let people register their store loyalty cards and gift cards in the app so a Wallet purchase at CVS, for example, would recognize my CVS ExtraCare card. Registering a gift card from, say Macy’s, saves the trouble of carrying the card at all times. (Currently, only American Eagle Outfitters allows loyalty cards and gift cards with Google Wallet in some of its New York stores.)

People also will be able to search for more store coupons on Google’s search engine and click to add them to their Google accounts for synchronizing with Google Wallet.

My first Wallet purchase was at CVS, where I picked up two boxes of tissues and a pack of AA batteries. I waited in the checkout line in anticipation of paying with just a casual wave of my phone. But when the checkout person asked if I had the CVS loyalty card, I still had to dig the card out of my wallet to swipe it for discounts. Once that was done, I waved my phone at the payment terminal, entered my four-digit security code and walked away.

When I bought lunch at McDonald’s, a woman nearby was in awe of my wave-to-pay method and said she couldn’t wait to get it. At 7-Eleven, the man working the register seemed startled by how quickly I paid for a bottle of water, especially after the guy in front of me had spilled several coins and bills on the counter to pay. I used my Google Prepaid Card at CVS and used my registered MasterCard at McDonald’s and 7-Eleven. Each card is represented in the app with an image of a credit card. My Citi MasterCard was the right blue hue and even had my name on it, with just the last four digits of the card number visible.

I added my Citi MasterCard to Google Wallet by entering my credit card information and creating a nickname for the card. After waiting a few seconds for the app to verify my information with Citi, an on-screen message said my card had a $100 limit, but that I could activate my full credit line using a code sent via text message to my cellphone number. This also allowed me to see more data about my account like my last statement balance, current balance and the last payment due date.

If a phone’s screen is in sleep mode, a user must wake it in order for transactions to work. This step was purposely added so people don’t unknowingly buy something when they walk by a PayPass terminal. The four-digit security code has an adjustable time-out period that can last for as little as one minute or as long as 30 minutes. I adjusted my code time-out to 15 minutes and was able, in two tests, to swipe my phone without entering the code.

Google Wallet can’t hold your driver’s license or other official forms of identification, so even if it takes off and works everywhere, you’ll still have to carry your license with you.

Write to Katherine Boehret at katie.boehret@wsj.com.

VeriFone CEO Douglas Bergeron told Bloomberg that his company anticipates acquiring one company a year at roughly $500 million to $700 million, along with several smaller transactions. In all, its purchases could add up to as much as $1 billion annually.

The San Jose, Calif.-based company is eyeing emerging markets. such as Turkey and Brazil, and is seeing investment opportunities by teaming up with Google and other players. Google Wallet enables Android phone users to link their bank accounts to their phones and use them to pay for items in a store, using near field communications.

The move to mobile payments may still be in its infancy, but as a major maker of credit card terminals, VeriFone must consider new entrants — such as Google –very disruptive. Earlier today, I wrote about how Apple products are becoming fairly mainstream at retail locations, and may increasingly reduce the need for registers.

In March, VeriFone lashed out against Square, the San Francisco start-up that has been getting a lot of press for offering a mobile-phone-based payments solution to small merchants. VeriFone claimed that the devices Square was handing out to anyone looking to accept credit card payments were not secure, but many considered the attack a sign of VeriFone’s insecurity in the market.

Since then, Square has started adding an additional level of encryption, and VeriFone has unveiled its own copycat product, which will allow retailers to use an iPad or Android tablet for in-store checkout. It also has other handheld devices for sale, along with iPhone-based swiping solutions.

VeriFone did not provide any hints as to what it may be interested in acquiring. However, Bloomberg suggested that VeriFone could be looking into adding distribution in Asia through an acquisition of a major terminal maker. Likewise, it could also be interested in a payment processor in countries where credit card penetration remains low but is growing. A payment processor would get VeriFone closer to merchants in those markets, and could enable it to offer additional services, such as coupons, daily deals and other loyalty programs.

As these companies are wont to do in the middle of the night, Yahoo, SoftBank and the Alibaba Group have reached an agreement in their nasty dispute around the Alipay payments unit, and they are ready to talk about it.

Well, not Alibaba’s CEO Jack Ma (pictured here), Yahoo’s CEO Carol Bartz or SoftBank’s Masa Son, but their functionaries are all set to discuss the deal.

The issue has revolved around the spinning out of Alipay by the Chinese Internet giant Alibaba, without the approval of large stakeholders Yahoo and Japan’s SoftBank, which the pair felt was a big no-no.

Much mishegas followed, but the trio has been hard at work on a settlement, which is here now.

Of course, had the three companies cooperated in the first place as joint owners and board members of Alibaba, this all would have been unnecessary.

5:48 am PT: The call starts without all kinds of regulatory info about what can and cannot be said, before being thrown to Yahoo CFO Tim Morse.

One interesting wrinkle is that SoftBank’s Ron Fisher cannot speak at all, due to some Japanese laws, which are unexplained. But, said Morse, he’s there to show his support.

Go, Ron!

Alibaba’s CFO Joe Tsai is up first to talk about the deal over Alipay, which he stresses does not really make much money now. As he says, it is “marginally profitable.”

Tsai walks through the facts that they have already outlined earlier today, including a variety of payments from Alipay to Alibaba, since — let’s be clear — it used to be part of Alibaba.

But Alibaba said it had to spin it out in order to get critical regulatory approvals from the Chinese government, which caused this mess.

Morse now comes on, noting the whole squabble really had “no direct impact” from a financial point of view on Yahoo or SoftBank at this time related to its Alibaba assets.

Well, shareholders of Yahoo might beg to differ, considering the huge hit the stock has taken due to the fight. Wall Street has long considered Yahoo’s Asian assets its most valuable part.

But Morse is pleased the complex agreement has finally been reached — I am guessing it was not easy to negotiate among three different countries with so much pressure.

5:59 am: Time for Q&A!

The first question is about more deets and also about the possibility of a liquidity event for Alibaba or its various units.

Tsai underscores that there might not be one or there might be one. In other words, the Chinese assets of Yahoo may or may not ever pay off.

The next question is about why Yahoo and SoftBank should have a cap on an asset they used to own 100 percent of. Good point!

Neither Morse or Tsai really answers the question, except for Tsai talking about how certain rules over foreign ownership of payment companies in China means it had to be like this.

“If you own 100 percent of the business that cannot operate, you own 100 percent of zero,” said Tsai.

Translation: That’s China, folks, so suck it up!

The next question is a promissory note, which Tsai says has value, even though it actually does not have value right now. China!

The analysts still are stuck on this fact that, under terms of the agreement, Yahoo will only get 37.5 percent of an IPO or other liquidity event, when it used to be owner of 100 percent of Alipay.

Good point: Will this happen to other Alibaba units, such as its Taobao commerce unit?

China is a good place to be, assures Tsai, which is cold comfort right now.

A lot of swirl around preferential terms in the deal for Alipay with Alibaba’s units, which seem to be the same as before. In other words, nothing has changed, except a lot of stock loss for Yahoo and less technical ownership of Alipay.

The Wall Street analysts on the line continue to be riveted to the idea of a liquidity event for Alipay and other Alibaba units, especially Taobao, and keep asking different versions of this question.

The last question is about more deets of the deal and new business ideas for Alibaba.

Tsai talks about a cloud-based system rolling out, for example.

The questioner moves to, you guessed it, a liquidity event.

“I don’t think we want to get into it at this point,” says Tsai.

Well, we do, but apparently Yahoo shareholders are not going to.

That said, the deal is finally settled, which has already given Yahoo shares a small bump today. And that’s not nothing.

Saverin, who also helped inform the plot of Aaron Sorkin’s “The Social Network,” invested in the company’s $6.5 million round back in March. He will also oversee the company’s entrance into the Asian market, although today the company is launching in the U.S. and Europe.

The goal of the Mountain View, Calif.-based company is to make entering a user’s credit card information into an online form a snap, while also making it much more secure, according to Jumio Founder and CEO Daniel Mattes (pictured right).

It works like this: To purchase something online, consumers hold their credit card in front of their webcam. The card is quickly recognized and verified without taking a picture or storing the data on the computer. The information is then entered in the correct format.

The technology will soon also be adapted for mobile phones so merchants can accept payments in person by using the phone’s camera.

Mattes said it solves two pain points — usability and security.

During trials, he said Netswipe was able to decrease the number of consumers who abandoned their purchases at checkout to 21 percent from slightly more than half. It can also cut down on fraud, because consumers must have the actual card in hand.

“It’s almost impossible to make and use fake cards. We can detect if the type is embossed or if there is a hologram,” Mattes said. “We spent a lot of time and money and effort on accuracy.”

With so many advances taking place in the payments space right now, the technology is already similar to a couple of solutions on the market.

First, there’s Square, the well-backed San Francisco start-up, which has created a card reader that plugs into either a cellphone or a tablet, so that payments can be accepted cheaply and easily in person. Second is Card.io, which captures payment data by holding a credit card up to a phone’s camera to automatically read the card information and enter the appropriate data.

Mattes said Jumio is “like Square for online,” although Jumio will also soon be coming out with a mobile version for making in-person payments.

Jumio will have three products initially, which will let merchants decide how comprehensive a payment network they want. If merchants only want to use the scanning technology via the webcam, it costs 15 cents a scan; for more comprehensive services, smaller merchants will pay a flat rate of 2.75 percent per transaction with no set-up or monthly fees.

So far, Mattes said Jumio has five merchants signed up, but he wasn’t willing to name them at this time.

Perhaps the biggest difference between the two platforms will be cost.

According to multiple sources, Google will take less than a 30 percent cut of the revenues, which will break the industry standard created over the past few years by both Facebook and Apple.

The launch of a games network on Google+ may provide a couple of immediate benefits to game developers if the Internet giant actually pulls everything off.

The obvious one is that it will give developers another outlet for its games. But the other perk is that it could provide a small way for developers to get back at Facebook after learning earlier this week that it has a complicated – if not favorable – relationship with Zynga, the industry leader.

More favorable terms, and that, could bring game developers flocking to Google.

I am also hearing that the game network will have significant technical differences. Two people described the platform as a “native client,” which means that Google will host the games on its own servers, rather than on the developer’s.

The expectation is that this could lead to faster game play for users, with shorter loading times and fewer bugs than in games found on Facebook.

A Google spokesperson declined to comment.

Last month, I reported that a games network was likely coming next on Google+.

At the time, a spokesperson issued this statement: “It’s important to keep in mind this is an ongoing project and this is just the beginning. We plan to add a lot of features and functionality to Google+ over time. We’re just excited to get started.”

Timing of the launch is still unknown; however, at Casual Connect this week in Seattle, publishers were buzzing (albeit quietly) about the upcoming launch. Everyone I spoke to was under the impression it was coming soon. One enthusiastic source said it will launch this month, while another said it was taking longer.

Details on the revenue split are also unknown, but there have been hints at what it could offer.

Two days ago, Google launched In-App Payments, which allow developers to integrate payments within any Web application, which is exactly the kind of technology it would need to monetize a social game network. What’s even more important is that Google disclosed it only charges five percent for the payments service.

There’s no evidence that in-app payments are connected, or if Google would ask for the same cut. But, at such a low starting point, it is probably not too far off the mark, since most of Google’s time and attention is focused on advertising.

So far, Google’s in-app payments are available to developers with a U.S. bank account, and work in more than 140 countries.

Of course, Google’s game network will not support developers without hundreds of millions of consumers to play the games.

So far it has delivered on that front, too.

Already, 10 million users have signed up for Google+, despite requiring an invitation. The user base has also been particularly active, sharing and receiving one billion items per day.

What Google’s network won’t be is a haven for developers who are seeking to get away from Zynga, which is larger than its next five competitors on Facebook combined.

Google is one of Zynga’s major investors.

Yahoo turned in another weak performance in the second quarter, with yet another decline in revenue.

This time it was five percent, compared to last quarter’s six percent. In other words, at least things are looking up as they go down!

While earnings per share rose smartly, Wall Street is still looking for strong sales growth from the Silicon Valley Internet giant, which seems unable to provide it.

Blamed most this time for the revenue fall: Yahoo’s changes in its display sales operations in the key Americas region, reasons for which were largely unspecified in the initial company press release. (You can see the damage in this slide deck from the company here.)

Maybe Yahoo CEO Carol Bartz will explain it all in its upcoming conference call with analysts (or she could try the I-don’t-know approach taken by News Corp. CEO Rupert Murdoch in PhoneGate hearings in Britain earlier today!).

2 pm PT: It starts with the usual regulatory blah-blah, which I always enjoy.

Bartz gets right into it, opening with the key problems with China’s Alibaba Group, as well as its display and search revenue weaknesses.

The fight with Alibaba is over its Alipay payments unit, which was spun out of the Chinese company without Yahoo’s say-so. Yahoo is a big shareholder.

Bartz says that the company was working on a settlement night and day.

But she quickly gets onto how display did not perform as expected in its key Americas arena. “Obviously, I am not happy,” she said.

Obvi! Neither are shareholders, Carol.

She says it was not about new competitive development. It was not about the economy. It was not about engagement.

So what was it? Changes in its sales leadership and organization, says Bartz, which has included talent walking out the door in droves.

A lot more than Yahoo expected, but no surprise to anyone who has been paying any attention to the brain drain at the company.

Bartz promises a new approach to sales, part of its endless turnaround, which is beginning to feel like a digital version of “Waiting for Godot.”

Search revenue, though, says Bartz, was better than expected.

2:11 pm: CFO Tim Morse is on now, running through the numbers and the display shortfall in the Americas region.

“We simply did not have appropriate coverage,” says Morse, noting consumer products, tech and autos as weak spots in the advertising market.

Thank goodness, then, for the guarantees from search revenue in the Microsoft partnership deal.

More numbers and then it is back to Bartz to talk about search, which is going better than the last quarter, when it was the culprit for the revenue decline.

She says that Microsoft and Yahoo were working together to improve the issues.

“We’d like to be further down the road,” says Bartz about the goal of search revenue per search growth, as well as settling all the other problems, such as the Asian issues.

And, by further, I am presuming she means actual forward movement, which is what roads are actually for.

2:27 pm: Q&A time, the part of our program where Wall Street analysts do not ask the questions that need asking (and where I win fancy journalism awards for pointing this delta out!).

Therefore, Bartz is first thanked for providing “color” about the display disaster and is not asked about more specifics of the disaster itself.

The second question still does not get to it either, but she does note Yahoo’s sales force has to sell beyond “Gee, we’re big” and come up with better ad solutions.

“The issue is we did not have enough sales people in front of the big clients,” says Bartz.

That’s because all those former Yahoos are now working at Groupon, LivingSocial, Facebook and on down the line and now in front of big clients for those hotter companies.

2:34 pm: Question about its Asian assets. Yahoo’s talks with Yahoo! Japan and Alibaba are separate, says Bartz, although I would add that they have non-movement in common.

And also a question about Yahoo’s interest in the acquisition of the Hulu premium online video service.

Bartz winks verbally and says nothing, which translates into: Of course, it is interested.

More on the reasons for the display fall-off, which Bartz makes clear is not due to big competitive threats, but internal issues.

Maybe she’s saving big competitive threats as the reason for a revenue decline in the third quarter!

I look forward to the quarter I get the finger pointed at me for causing revenue to fall, due to my snarky posts.

Now, we are into softball questions about improvements in engagement. It’s up, but no one asks why Yahoo is still not doing anything very cutting edge in product innovation compared to competitors.

I believe Google has launched at least 14 new social networks since this Sunday, along with its strong quarterly performance last week. And Apple, well, blew away its quarter today as it is about to release more cool new stuff later this week.

And that might be the crux of the issue for Yahoo, which might not solve its woes by throwing a more focused sales army at the issue.

That’s because Yahoo’s products are simply not nearly has social as Facebook or even Google right now, which might be the true problem as old customers move on to new advertising solutions.

Whatever the reason, Yahoo clearly needs a refresh of its ad products and how it sells them, especially in its fast-growing mobile, video and communications products.

Bartz talks about getting better expertise, a tighter regional focus and other issues of going to market, which is perhaps something she might have realized many, many quarters ago.

After all, she’s been in charge for a while, and these issues are not new.

In fact, in an earlier quarter, Bartz was stressing “tentpole” events and anchor media properties and the power of the size of Yahoo as a selling point.

This was in April, in fact, in the first quarter of this year.

As I wrote then:

“CEO Carol Bartz excited was the Silicon Valley Internet giant’s traffic gusher for big tentpole events such as the Super Bowl and the Oscars. In fact, Bartz practically sounded like a gushy “Entertainment Tonight” flunky when talking to Wall Street analysts about Yahoo’s Oscar news, games and other offerings. She proudly noted the site’s efforts generated more than a billion pages views.”

Now big is out! Moving on!

The last question is another about Yahoo’s talks with its Asian partners.

“It’s complex,” says Bartz.

You can say that again.

That’s the question I asked some digital money experts, whose job it is to push the creative boundaries on payments.

So, having captive reps from some of the key companies — BOKU, BilltoMobile, Intuit and Tapjoy — involved in leading the charge to do away with cash and plastic, I wanted to know what they carried around daily.

And — given I was moderating a panel for the MobileBeat 2011 conference, titled “The Likely Winners In Mobile Payments: Carriers, PayPal?” — it seemed like an appropriate query.

You’d think they would be on the cutting edge, right?

Wrong!

In fact, two of the panelists were still carrying around checks; one had dozens of credit and debit card options from banks around the world; and two were even carrying business cards from their previous employers, because they believed they could get discounts at rental car agencies.

Only one had a digital wallet.

That was Steve Klebe, VP Business Development & Strategy, BilltoMobile, who actually had an NFC-enabled sticker on the back of his phone, which was connected to his Discover account. But he’d only used it once.

It was also Klebe who carried around a blank check, in case of an emergency. Ron Hirson, BOKU’s SVP Product & Marketing, also had the kind of money that folded — a $50 American Express travelers check.

Remember those?

Omar Green, Intuit’s director of strategic mobile initiatives, had the biggest wallet — bursting — with a giant pile of cards stuffed in it. Deng-Kai Chen, director of product management at Tapjoy, easily won for carrying the lightest wallet — he claimed it was bad for your back if you sat on anything bigger in your pocket.

Everyone also had a variety of loyalty cards, photos, receipts and transportation passes.

What about me?

As the solitary female representative at the table I was the only one with coins, including about $2 in pennies (because I’m too lazy to ever spend them). I also probably had the most cash — around $28, mostly in $1 bills.

So how close are we to a mobile wallet revolution?

Judging by what was in our wallets, you might want to wait a while.

Photo Credit: allie.