Much like a Google search, Club Penguin’s new chat box allows kids to use predictive text to type in a message.

As shown in the screenshot, words appear as the user begins typing — in much the same way that Google tries to predict what you are searching for. But unlike Google, there’s a limited number of phrases kids are allowed to use, in compliance with Internet regulations concerning young children.

This is the first major change Club Penguin has made to its chat in six years, and Lane Merrifield, co-founder of Club Penguin and now EVP of Disney Online Studios, acknowledged that it’s a pretty obvious way to do it.

That’s because filtering, in particular, is really complicated, Merrifield said. Club Penguin has a team of 200 to 300 workers in seven countries which constantly monitors discussions and kicks out any kids who misbehave.

With this new system, Club Penguin has examined years of chat logs to discover how kids communicate and to learn what phrases they use on a regular basis. The predictive engine will have 300,000 phrases to start, and will support English, French, Portuguese and Spanish.

For instance, a kid may type in “Want to go to the … ” and the engine will suggest “dock, lighthouse, nightclub or beach.”

By using predictive text, kids who may not know how to type or even spell can communicate much quicker. The game’s core demographic is between the ages of 7 and 11; typing proficiency often doesn’t accelerate until the age of 10.

Using the old Club Penguin system, kids would type in a phrase, which then would have to be approved. Spelling errors could cause a completely innocent phrase to be rejected.

Chat has become one of the most popular features in Club Penguin, with kids exchanging more than 56 million chat messages a day.

In all, 150 million accounts have been created on Club Penguin, and more than 21,000 kids log in daily.

Along with the new chat system, Club Penguin is making a few other social changes.

It will now be easier to locate friends by adding them to a friend list. Previously, kids were spread out across 150 servers in order to properly balance the load of users. Now they can find friends and jump to their locations more easily.

Even for a hermit like me, it seems evident that there are local social opportunities beyond deals and check-ins. It’s an area ripe for social Web and app development.

Today, a start-up called Nextdoor launches an authenticated network of social networks for neighborhoods. The service is utilitarian and carefully focused on fostering small private communities.

Nextdoor CEO Nirav Tolia pitched his site to me like this: You have Facebook for your friends and family, LinkedIn for your business network, and Twitter for your interest graph. But what about your local community?

Nextdoor itself is kind of like Facebook, which started out requiring student users to authenticate with their .edu email addresses, and still requires real names. The Nextdoor site is built to be a safe haven for sharing personal information with a small, relevant audience, and it verifies that users actually live in a neighborhood, using postcard codes and phone listings.

But do you really want to share so much of your identity with your neighbors? And do you want to depend on a site like Nextdoor reaching critical mass so that you can talk to people who live down the street?

Another local social start-up, Blockboard, is taking a different approach. It’s more like Twitter, where users can represent themselves however they want. It’s also focused on mobile, and has so far only launched in San Francisco.

Blockboard’s authentication is much simpler than Nextdoor’s. The first time someone uses the Blockboard iPhone app, it validates via GPS that they are located in a particular neighborhood. (Once they’re registered to that community, they don’t have to be physically there to post.) Users usually use pseudonyms.

Blockboard CEO Stephen Hood — whose team comes from the laissez-faire community sites Delicious and Craigslist — said he thinks real identities aren’t that important to communicating local information like event postings, apartment listings, and lost and found.

Plus, keeping local information private is a bit of a red herring, Hood argued. “People aren’t interested in pretending to be in neighborhoods they’re not in, because the content is not relevant,” he said.

Hood thinks a successful local social network must start on mobile devices in order to become a resource when people are out and about in their neighborhoods.

And maybe someday, if all goes well, those local social network users may put down their phones and actually talk to each other.

But the question of just how compelling the service will be long term remains to be seen. Bradley Horowitz, the project manager for Google+, joins the AsiaD stage to talk about where things are headed.

Peter Kafka: So what is Google+?

Bradley Horowitz: “It’s more than a product. It’s a project.”

That means it will take longer and be bigger than a typical product.

Kafka: The view outside of Google is that it’s the company’s response to Facebook.

Horowitz: “There are parts of Google+ that will look very familiar” to people who have used social networks. But other parts are very different, he said.

5:03 pm: Kafka: When will regular people use it?

Horowitz, to Peter: Are you a regular person?

Kafka: No.

Horowitz: Well, we have 40 million users; we’ve reached beyond the early adopters.

It’s open to everyone now, and that’s only been the case for a couple of weeks.

Kafka: But why would you want to?

Horowitz talks about Hangouts, the group chatting feature.

5:04 pm: One of the lessons Bradley said Google has learned is that people want different levels of privacy and relations.

5:07 pm: We are just getting started, Horowitz said, adding the project is just getting started.

He quotes his boss, saying that the company has shipped the “plus.”

“We have yet to ship the ‘Google,’” which brings the entire company’s products into the service.

Horowitz also notes that most Google services actually know relatively little about their users.

“Everything gets better when we know who our users are.”

Kafka: Do people really want a different relationship with Google?

Horowitz: “I think provisionally. They have to have a good value return. They don’t want to do it for the sake of Google. They want to be able to manage it.”

It needs an incognito mode as well.

5:10 pm: Isn’t setting up Google+ kind of a pain?

Horowitz: It was a big gamble on Google’s part, he said.

“No one wakes up and says I want to segment my life into circles,” Horowitz said. However, he said that the company put one of its best designers, Andy Hertzfeld (of early Mac fame), on the project.

5:11 pm: What did you do right and wrong with Buzz?

Horowitz: Buzz was in the older model of Google, its bottoms-up, let-a-thousand-flowers-bloom mode. Now the company is trying to take its best flowers and make a bouquet.

I think we are doing less throwing things at the wall.

People are aligning around fewer efforts. It’s a very healthy thing for this company.

5:13 pm: Are you saying goodbye to 20 percent time, then? (The idea that Google employees can spend 20 percent of their time doing whatever they want.)

Horowitz: I think 20 percent time still exists. What does change is a higher bar for what we are going to put to market, sort of an editing function.

5:14 pm: Kafka asks, under that new model, would Google TV have even come to market?

“I can’t specifically answer that,” Horowitz said. “I’m not close enough to Google TV.”

5:15 pm: Expect a lot of social influence on search. Some 20 different projects aimed at making search more related to who is doing the searching.

“The opportunity to bring social into search is huge,” Horowitz said.

5:18 pm: About that memo — the Google+ critique that was supposed to be internal that was made public.

Horowitz: “That wasn’t a great day. My heart sank when I read that.”

Kafka: Because it was aired publicly or because it was right?

Horowitz: “I think the tone of the post mostly was disheartening.”

There were elements of validity, he said. But there were also areas where that Google employee, who doesn’t work on Google+, was in the dark, he said.

“We’re moving at light speed. We’ve been in the market for 120 days.”

That said, Google is in no rush to build its user base, Horowitz said.

5:22 pm: You are going to allow pseudonyms now. Why?

There are many reasons. “Those who have defended that use case have done so with great passion.”

The company wants to open to other groups, including minors and those Google Apps customers that are the businesses actually paying Google money.

“We want them in and we’ll fix that.”

Brands, too, have been told to wait.

“We kicked out Nike and Coca-Cola” not because we didn’t want them, but because we want to do that in the right way.

At the same time, Horowitz said, they don’t want to make it too easy for bad actors.

5:25 pm: Kafka: Why did you go from Yahoo to Google?

Horowitz: I was going to become a venture capitalist.

“They (Google) sort of talked me off the ledge,” Horowitz said.

Every myth you hear about Google is grounded in reality, both good and bad. Within weeks it was clear to me why they were as successful as they are.

5:27 pm: How would you fix Yahoo?

Horowitz: “Wow. I am really ill-qualified to answer that.”

Kafka: You are kind of qualified.

Horowitz said he actually was talking with some other ex-Googlers and they noted that Yahoo is not actually a struggling company.

They have brand and market position. “What’s missing is relevance.” They need to hire good people and take some risks.

It would be a shame if the strategy is just milking the current audience, he said.

“They can do a lot more than that, and I hope they do.”

5:29 pm: Q and A. What about Google+ as a platform?

Horowitz: We have thought about platform from the inception. It’s not an afterthought. This has been part of the strategy from Day One.

We don’t want platform to be the Wild West, and we want to keep the stream useful. “We don’t want to repeat the sins of previous generations.”

I don’t think it means hand-curation and approval processes.

“We are getting enough signal within the system that things can self-correct.”

Another audience question. Sure, but where is the Google API? When are we going to see it actually be a platform?

Horowitz: I love the fact that 120 days after launch there are demands that we build a platform. “That’s a champagne problem.”

Over time, he said, there will be more opportunity. “It’s not far off.”

There’s a lot on the agenda, including letting in Google Apps customers, minors and those using pseudonyms in addition to opening it up more to developers. All are on the agenda, he said.

Horowitz said that is part of why the company is focusing more.

“We would rather do fewer things well than tend to a thousand flowers with equal attention,” he said.

5:36 pm: Google is still more open than most companies when it comes to empowering workers’ creativity. “I still think there is a tremendous amount of Google culture that will never change.”

5:37 pm: Kafka: Is this all Larry’s influence?

My experience is that Larry is a consummate product-oriented leader. “It’s thrilling. It feels like the company is coordinated in a way that I have never seen. I could not be more impressed with Larry as CEO. I didn’t expect this level of change in the company culture.”

So who is using Google+?

Horowitz said they aren’t going into detail, but there are 41 supported languages. “There’s a higher concentration in the U.S.” Trying to get local content, including a popular Hong Kong pop singer.

Bradley Horowitz Session Photos

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

Google+ users have uploaded more than 3.4 billion photos to the service so far.

“People are flocking into Google+ at an incredible rate and we are just getting started!” Google CEO Larry Page exclaimed in a press release statement.

“It’s still incredibly early days,” Page added on a call with investors on Thursday, while complimenting the Google+ team for cranking out features. “Our goal is far bigger than the feature launches themselves.”

Page said he wants to provide an “automagical” experience across Google, by “baking identity and sharing into all of our products so we build a real relationship with our users.”

In other words, he added, “We shipped the +, and now we’re going to ship the Google part.”

See also: our interview with Google+ VP Bradley Horowitz about plans and expectations for the project.

Yesterday, it hinted that it will share its plans for leveraging Facebook’s new HTML5 mobile platform, but that there are other surprises to come. The event is titled “Unleashed,” so expect a lot of talk about where the company is headed with mobile in general.

Stay tuned at 10 am PT to hear the latest from the mega-successful social games company, which is currently seeking to raise $1 billion in an initial public offering.

9:57 am: Just showed up, expect the show to kick off any minute.

The press conference is taking place in Zynga’s new headquarters. In the atrium, there’s a big stage set up, and the press gallery is sitting in a bunch of retro chairs. Feels a little bit like an MTV talk show.

Zynga invited my dog, Fletch, to come play at the event, but he doesn’t have a travel budget, so he had to stay home in Seattle.

Pretty fitting that Zynga’s office, a.k.a. “the dog house,” has a hot dog stand. As you may know, the company was named after the dog, Zinga, owned by founder Mark Pincus.

10:10 am: The event may be starting. We are watching an infomercial on how Zynga was able to contribute to Haiti relief after the earthquake.

10:25 am: Ok, while we waited to get things started I was able to go get a Blue Bottle cup of coffee that takes five minutes to drip into the cup. What a perk!

Someone is getting excited. Just heard my first barking dog.

10:35 am: Here we go. There’s a montage of games from Poker to CityVille and Adventure World, Words With Friends and FarmVille. You’ve probably played one of them.

10:37 am: Founder and CEO Mark Pincus has taken the stage.

This is the first media event of any kind we have done in our new building, he says.

He jokes that they are about games, and we should feel comfortable being loud today.

He said they are launching 10 new products today, all of which have been in development for a year. Today we will meet the people and faces behind the innovation.

Pincus: There are 1,700 Zynga employees in this building alone, and at some point they will come out and say hi to us.

Pincus: He wants to know how he can get “you guys” to play games. We are all busy, and how can he get us all to play.

For us, it’s a platform. We aren’t the company that will make the next hit game, we are trying to do something broader than that. We want this experience to make up a platform for play.

10:44 am: Pincus says they spend a lot of time on the “FTUE,” or the “first time user experience.”

We want to give you a five to 15 minute experience that feels like a meal, we don’t try to ask you to change your day. Just like a good show, and I’ve been addicted to “Breaking Bad,” if you do like our games, we hope to give you enough depth for you to invest three, six months or a year.

We are going to show off Zynga Direct, whether on the Web or mobile, we are going to build a whole sandbox around the games and not just in the games. Facebook is here today and we are excited to be their launch partner for their platform announced yesterday. We’ll be showing off three HTML5 games that will be part of that.

When we unveil the pieces of Zynga Direct, we hope that you see that it is the deepest Facebook Connect experience on the Web today.

10:48 am: We are showing you CastleVille today, which is the next Ville game in our franchise. That game has been in development for more than a year, and it has beautiful art. It has new ways to collaborate and get ahead by partnering with other players in the game.

We are going to show you a new casual games category today in the hidden objects genre.

David Ko, Zynga’s chief mobile officer, will be showing a number of mobile titles launching in the next few weeks.

10:51 am: Pincus is now handing over the stage to Cadir Lee, CTO, who is in charge of building out so much of the technology in the back-end.

10:52 am: Lee: The first thing I want to talk about is our gaming engine, which has been built from scratch on Adobe’s Flash 11.

We have our own private cloud called “Z Cloud,” which is focused on being able to play our games all of the time no matter if it’s Christmas Eve. We’ve been known to deploy a 1,000 servers in one week in order to support a new game.

This isn’t the sexy stuff, but Zynga’s cloud and gaming engine technology is key. Often, the company is considered an analytics-driven company, rather than a gaming company. Lee is touching on some of this now.

Lee: We’ve long been known as an analytics company, which shows how our players engage. How do we match people up, so that you can have a social experience with a person across the street or around the world. How do we connect you with the right person at the right time.

Roy Sehgal, VP and GM, is now on stage to unveil a new genre, called “hidden objects.” It’s one that Disney’s Playdom has developed through a game called Gardens of Time.

Zynga says its first game is called Hidden Chronicles.

The concept behind hidden objects is finding clues hidden in a room, sort of like looking for Waldo. They are right in front of you, but difficult to find.

Up until Playdom’s release, critics didn’t believe that the popular PC download category could be made into a social game.

Sehgal: It’s going to be social. It’s going to be extremely easy to learn, but hard to master.

10:58 am: You can play with your friends to see who can find the most hidden objects, or provide hints to your friends.

This game is extremely interactive. No matter how many times you play an individual scene, it will be fresh. I believe it will be one of the most beautiful games you will play.

On the screen, Sehgal is showing various scenes that take place on a train, underwater or in the outdoors. The art is rich and historic-looking.

11:00 am: Now there’s a demo of the new Mafia Wars 2, which just launched yesterday, and is promising to be a much richer experience than the original version that came out three-plus years ago.

Since it’s already out, feel free to check it out on Facebook. No need to read a description here.

11:06 am: Mafia Wars 2 is also now live on Google+, which is the company’s second game on the platform after Poker. Remember, Google has a substantial stake in Zynga.

11:07 am: There’s an update to Zynga’s Poker game next. It was launched in July 2007, and after four years, we are still the largest and most social Poker game.

Zynga is unveiling Zynga Casino, including Zynga Bingo.

Casino games has been identified as one of the leading categories on Facebook with others experiencing lots of success, including DoubleDown Casino.

Zynga Bingo will be launching soon.

11:10 am: Bill Jackson, Creative Director, is now on stage. He’s from the company’s Dallas studios, and he says they developed the latest in the Ville franchise, called CastleVille.

The other Villes in the franchise are FarmVille, FrontierVille, CityVille and now CastleVille.

Jackson: It’s a new level of social, and offers the best of all the Ville games have to offer.

The game has a whole new cast of characters, who look like they are from Shrek, complete with rugged heros and refined ladies who fall in love.

Jackson: CastleVille takes storytelling to a whole new level, and in a personal way. Your journey through the game is different based on who you are.

Zynga is bringing massively mutliplayer role-playing games to the mass market.

CastleVille will have music from an entire orchestra that was recorded in Seattle. Jackson says this is the first time this has been done in a social game, although it is common in console games.

11:18 am: The peanut gallery has been asked to turn around to see all of the Zynga employees — or at least half of them — that have gathered around the balconies of the atrium.

Pincus: We just wanted you to see a few more faces.

Pincus is now introducing John Schappert, who recently joined Zynga as COO from Electronic Arts. He has taken over running all of our games, leaving Pincus to be more entrepreneurial.

11:22 am: Schappert: We are building every kind of play for everyone, everywhere.

We are building on iOS, Facebook, Android, Google+ and Tencent in China.

Helping us deliver on play anytime, anywhere, is David Ko, chief mobile officer.

Ko has an update on Zynga’s mobile plans, which have not been as aggressive as others have been in the space so far.

Ko: We’ve always felt that we need to be the best content creators out there, regardless of what platform.

It’s my pleasure to not talk to you about one or two new games, but five new games launching shortly. It is around Facebook’s HTML5 platform announced yesterday.

The first two are Words With Friends and Poker, and the third is FarmVille. All three games will be available tomorrow.

Another new game is Mafia ShakeDown. You’ll be able to request missions and have the opportunity to be the next “Don.” This game will be coming soon, so stay tuned.

The last game is called DreamZoo, which is Zynga’s first game in the zoo genre.

In a short video, Zynga shows off DreamZoo. You can collect animal varieties and feed and clean your animals.

11:29 am: Schappert is back on stage. He says they have over 60 million daily active users, and they play games over two million minutes everyday.

He is unveiling something called Project Z, which is a Facebook Connect enabled platform. It allows you to play in an environment that’s tailored just for games.

In a sneak peak, a video says players are able to chat, share and form instant communities worldwide.

Schappert: It’s a social gaming playground. You can start a game on Project Z and then continue on Facebook and vice versa. It’s not launching today, but people can start creating a gamer tag starting worldwide today.

11:32 am: Pincus is back on stage to wrap up the presentation:

We really want to build a platform for play. We haven’t changed our vision since starting. We want to be the biggest macro bet on social gaming. We believe in social gaming. We believe that everyone around the world will embrace play, so everything we are doing is an attempt to bring that to life.

We know it’s early and it’s primitive, we know so much of game play and social-ness is early, and over the next few years it’s going to be so much more. It’s going to be mobile. There’s going to be a World of Warcraft feeling, but something you can understand in five minutes.

11:35 am: OK, that’s it folks. Formal presentation is over.

In summary, before today, there were a few niches that Zynga had not yet entered. That left opportunities for competitors to do well on Facebook. With Zynga’s 10 announcements today, including a number of new mobile and social games, the gaps have narrowed significantly.

Zynga has expanded into new genres, like hidden objects and more broadly into casino, and has five new games on mobile. It is also launching its all-new standalone online game network separate from Facebook that goes direct to consumers.

If Zynga was looking for a big bang before its IPO, this might have been it.

Thanks for reading — more coverage and analysis coming shortly.

AllThingsD will have live coverage here.

12:30 pm: Okay. Q & A kicking off.

First question is on whether Open Graph will eventually allow other types of devices to connect, such as perhaps cars.

Bret Taylor: That’s certainly our vision. Today, a Web browser is required.

12:32 pm: Question Two: Did you need to re-architect Facebook for Timeline, to access and store older information?

For Timeline we did build a new backend to store and query, says engineering head Mike Schroepfer.

12:34 pm: No Zuck at the Q and A yet, by the way.

Some questions about the Graph Rank, about how it will work and how Facebook will keep people from gaming the system.

Taylor: As a user of an app, all this is based on the explicit signals you’ve given.

12:37 pm: Have you guys spoken to Apple?

Today’s launch was just with a few launch partners, Taylor said.

“It’s obviously our ambition to have every app be socialized, so long term, hopefully [re: Apple],” Taylor said.

12:39 pm: So in advance of the inevitable criticisms over change and privacy, what’s your take?

Chris Cox: Facebook is going slowly, publishing a lot of material on what it is doing. “It’s not like people are going to log in one day and everything has changed on their profile,” Cox said.

Taylor adds that the company has worked with a number of privacy advocates on the changes. In particular, there are new dialog boxes that not only tell what an app will post, but also show the kind of information an app will post to their timeline.

You can also limit how many people an app shares information with. For example, when you agree to let the IHeartRadio app broadcast every song you listen to, you can limit it to your three friends that won’t judge you for playing Wilson Phillips.

12:43 pm: What do you think of the comparison to Facebook’s ill-fated Beacon from a few years ago, which didn’t roll out so well, and what about people who don’t opt-in?

Eventually we will have to move people over, Cox acknowledges. As for the comparison to Beacon, Cox refers to the clear presentation of whatever an app wants to share.

“We’ve learned a lot since 2007,” Cox said.

Schroepfer adds that you have to explicitly install one of these new Timeline-compatible apps.

12:45 pm: Zuck has arrived.

12:46 pm: News nugget: Facebook now has 800 million users.

I asked a question about the app discovery experience that Facebook is building. So is it an app store or just part of the general profile/timeline experience?

“We’re not really planning an app store,” Taylor said. “The main way people find apps on Facebook is through their friends.”

That doesn’t preclude us from doing something like an app directory eventually, he said.

12:50 pm: So, if I have logged into sharing my music, is there a way to prevent sharing that Brittany Spears song? (Someone else asked that. My bad music is MUCH more embarassing.)

Zuckerberg: You can always change afterwards. Some apps will also allow you to have more granular control over what you share from within the app.

12:51 pm: Can you create a timeline for a public celebrity page or for a brand?

The first version is just for individuals, Zuckerberg said, adding that the team was working on this for about a year.

12:52 pm: Zuckerberg was asked if these features appeal more to younger people.

We definitely find the different age groups do stuff differently. “I think the Timeline piece is going to be really universal,” Zuckerberg said.

12:54 pm: Zuckerberg asked whether people overreact about changes and privacy.

“The recent updates we did with news feed and ticker, we’ve actually been testing that publicly for a couple of months,” Zuckerberg said. As for apps, Zuckerberg notes that things only change when a user actively chooses to install one.

As for Timeline, he noted that the company is starting by rolling out to a small number of people and will likely make changes along the way.

“We’re definitely going to get a lot of feedback for that,” he said. “I think we do listen. Also, the world is moving quickly and we want to be innovative.

Zuckerberg wraps up the Q and A.

“This is the biggest update we’ve done in a long time.”

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• Big Media Hands Over Its Locks and Keys to Facebook
• What Facebook Has Announced So Far: The Timeline — And Verbs
• Get Ready, Facebook Apps Will Ask for Your Permission Only Once
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Kicking off its f8 developer conference on Thursday, Facebook unveiled a series of changes to users’ main profile pages with a new view, dubbed “The Timeline.” In addition, Facebook will now let people do actions beyond just “liking” something. Users, as expected, will be able to show they have read a particular book or seen a particular movie.

Wearing jeans and a gray T-shirt, CEO Mark Zuckerberg showed off the new view, which allows users to go back in time and see the most important moments of their life, as well as apps and other things that are important to a person.

“It’s how you can tell the whole story of your life in a single page,” Zuckerberg said, showing his Timeline, which included a baby photo and a photo of him as a young kid wearing a pink tie and suspenders.

The Timeline view can also be seen with just photos or even on a map. Apps can plug specifically into the timeline. In many ways, the timeline hearkens back to the early days of Facebook when most apps added boxes with interesting features to a user’s profile page.

Among the sample apps that Zuckerberg showed were ones that let users add meals they have cooked or runs they have taken.

The new feature also allows a user to do more customization, starting with a giant “cover photo” similar to About.me, plus the ability to highlight major events that users want featured on their timeline.

“You have complete control over your timeline,” Zuckerberg said, noting that users can choose both what appears on their timeline as well as who can see it, such as everyone, or just friends.

Zuckerberg’s keynote is just getting started. Click here for AllThingsD’s live blog.

Related posts

• The Big Picture of Facebook f8: Prepare for the Oversharing Explosion
• Facebook’s f8 2011: This Is Your Life
• Big Media Hands Over Its Locks and Keys to Facebook
• What Facebook Has Announced So Far: The Timeline — And Verbs
• Get Ready, Facebook Apps Will Ask for Your Permission Only Once
• Facebook Gets in the App Discovery Game with “Graph Rank”
• Live: Facebook Answers Some Questions About its New Social Order

Starting today, Google+ will include search of people, posts and popular Web content, Google said in a blog post, in which it also announced Google+ is open to anyone who wants to sign up (not that it was terrifically hard to get an invite before).

Along with search, Google released a pack of new features for Google+’s most distinctive feature, group video Hangouts.

Hangouts are now available for Android phones with front-facing cameras, for larger viewing audiences, and can include screen-sharing, basic sketching, Google Docs and public topic listings.

Sometimes a start-up’s product is pretty, sometimes it’s from famous founders and occasionally it’s dead simple.

Qwhisper is none of those things — in fact, it’s barely even a product at this point. But its team of founders are attacking a devilishly hard problem.

The company and Web app of the same name attempt to search and categorize social media updates with an accuracy that even the sector’s giants have been unable to deliver thus far.

“Search for social is really tough. When someone mentions Mars, you don’t know if they mean Mars the planet, the god, Bruno Mars, the rover, or the candy bar,” said Qwhisper co-founder Eldar Sadikov. “With Web pages, there are all kinds of context clues to help you figure things out, like links and other data. Social content is just so much shorter — you have to be very sophisticated to [make sense of it].”

What that means for us avid Twitterers is that, as of now, searching for a category of tweets is not a useful endeavor — and forget about searching for tweets about a simple but amorphous topic such as “popular music.”

But Sadikov’s Qwhisper, which is in private beta, makes use of some new search algorithms to reorganize a user’s social streams.

Its founders claim the search and sort technology of Qwhisper can reliably deliver tweets to the user based on a topic, category and search term.

So, how does Qwhisper do it?

Sadikov made an attempt at outlining just how complex it is for a computer to make sense of a stream of single tweets:

“You need much more sophisticated natural language processing technology [for social] than what is needed for Web pages. [The system must] understand words like “lol,” “cuz,” “gonna,” “gotta” — because there is so much colloquial language in social content, compared to Web sites.”

Only after dealing with those problems, which are in themselves complex enough for several research papers, can Qwhisper layer in the really complex processing to answer such contextual questions as: What does this person do normally? And, what does that person normally talk about?

But every start-up with a search component boasts custom algorithms, so why should users be confident that Qwhisper’s are superior?

Qwhisper is touting the company’s intellectual pedigree.

Sadikov and some of the other co-founders left their PhD programs at Stanford’s InfoLab to start Qwhisper — the same InfoLab where Larry Page and Sergey Brin developed some of the early parts of Google.

Sadikov also spent time at Google, where he worked on building an algorithm for organizing small sets of words together in contextually relevant groups.

Not too long after, he gathered a group together to launch Qwhisper using some of the same concepts.

If Qwhisper or the engine that powers it proves successful, the consequences could be far reaching.

Delivering tweets and other social content in contextual channels could mean a whole new class of applications — and advertising — all built around social content.

But complex graph-modeling and multivariate algorithms aside, the litmus test for Qwhisper will be simple user interaction.

“Ultimately, if I post something like ‘saw inception last weekend – amazing,’ the system needs to recognize what that is about … even though it says nothing about movies or genre,” said Sadikov.

I caught him and one of his co-founders, Montse Medina, at the recent Stanford StartX incubator demo day to talk more about Qwhisper: