Whoa! Sorry, we may have gotten just a little over excited about Walt’s Personal Technology column this week. He responded to popular demand and submitted a full review of the magicJack. Yes, that magicJack. No one can ever accuse Walt Mossberg of not being a man of the people. So what did he find? Well, the little plastic USB dongle that ranks up there with rotisseries, Chia pets and The Clapper in the pantheon of hard-sell TV adds actually delivered on its promise. MagicJack connects via USB to a computer, and has a standard land-line telephone jack on the other end. Walt started it up, made some calls, and even tried out the customer service center, which turned out to be efficient and helpful. Among the few drawbacks were the need to use the phone number that comes with the device and the fact that it only works when your computer is on and connected to the Internet. Mossberg’s Mailbox was full to the brim this week with some pretty targeted questions about security, the grim future of the dedicated PDA and e-readers for libraries. As it turns out, running a virtual Windows machine on a Mac can lead to a very real virus if you aren’t careful. Katie’s piece at Mossberg Solution made sense of this week’s biggest question mark. What the heck is Google (GOOG) Buzz? She broke the new social network from Google down to its bare bones and explained some of the controversy surrounding how it decides who’s added to you Buzz list. The new social feature is now built into Gmail, but it seems the exact relationship between your Gmail contacts and Buzz is still being worked out. Katie nails it all with an expertly simple explanation of the service and controversies.

BoomTown started the week off with a little insider info about Micheal Dearing, the hottest angel investor you’ve never heard of. Dearing, a former eBay (EBAY) exec and current professor at Stanford’s design school, has been inside early on high-profile start-ups like Aardvark, Xoopit and Mixer Labs. Kara shared a meal with the start-up whisperer and got more out of him than most, even if he still kept pretty tight-lipped. Kara also shared some viral video love featuring some hardcore Avatar fans. We can’t tell if these live action Na’vi role players are kidding. Maybe we’ll ask their king, James Cameron, when he joins Kara on stage at the next D conference. Toward the end of the week, Kara posted about what may be the strangest love triangle of the modern era. The Facebook-Snickers-Betty White trifecta is so strange we can barely even comprehend the letters in it. It seems that Facebook users loved the Betty White Super Bowl ad for Snickers so much that they held a social media gun to Lorne Micheals’s head until he got the Golden Girl to host “Saturday Night Live.” The only thing that could unseat the Betty White triangle from weirdest social media moment of ’10 is the much rumored Barry White-KFC-America’s Next Top Model episode we’ve been hearing about. There: Rumor started.

MediaMemo led off the week with Weekend Update’s favorite sort of post. It was yet another beautiful e-mag concept, this time from Condé Nast’s Wired. The mag looked snappy, beautiful and functional–even if no one, besides maybe Stephen Colbert, has a device that can display it yet. Peter also covered the second instance of an emerging trend in the video rental business. It looks like Redbox, the ever-present rental kiosk company, has agreed to go the way of Netflix (NFLX) and keep recently released DVDs out of the rental pool in exchange for a cash break from Warner. Peter rounded things out with a post about Web TV service Hulu and the likelihood of a Hulu player for the iPad. Peter’s post explores the probability that an iPad Hulu would not be a free Hulu. This situation is pretty bounded and specific, but the deeper question is one facing a great many media companies right now. Will users be willing to pay for convenience of displaying a service on the iPad that they can get for free on there home computer, and by extension, will they pay by the app or pay for the content? Weekend Update can’t wait to see how that one shakes out.

Over at Digital Daily, John started early in the week with a quick peek at Microsoft’s (MSFT) Windows Phone, the new smartphone operating system from the maker of Windows Mobile and Windows Vista. As it turns out, Windows Phone looks pretty slick. The interface isn’t a shrunken version of the desktop OS, which is a very good thing. Midweek, John scaled a mountain of tweets to report from the very top. It seems that Twitter’s traffic has grown over 1,000 percent since last year, according to comScore’s (SCOR) January report. It may now be impossible to shut the flock up. To button up the week, John covered a decision by the Federal Trade Commission that allows Google to buy and sell power wholesale, just like an energy utility. Google execs insist that the move doesn’t signal their intention to enter the power arena as a utility. They just want to buy power like anyone else. After all, electricity is the raw material of Googling.

We’re so confident that you’ve enjoyed this Weekend Update that if you aren’t 100 percent satisfied, you can send it back for a full refund of your purchase price, no questions asked. You can look for all your favorite AllThingsD accessories next week. John, Peter Kara and Walt will be back to ship top-quality content directly to your door at no extra charge. Top quality, easy to use and in a variety of colors, there’s something for everyone at AllThingsD.

And now back to your regularly scheduled program.

Or Xoopit, the social email firm, which Yahoo (YHOO) bought last summer for $20 million.

Or Mixer Labs, creator of GeoAPI, which Twitter picked up in December.

And then, there’s last week’s purchase of social search phenom Aardvark by Google (GOOG) for a reported $50 million.

What a lot of people might not know is the prescient but very low-profile angel investor all these companies have in common: Michael Dearing (pictured here).

The former top exec at eBay (EBAY), who has worked at Bain & Company as well as Disney (DIS), is now a Stanford University professor.

But more to the point, Dearing has quietly become very successful at picking innovative winners from a wide range of mostly consumer Internet start-ups, mostly in Silicon Valley.

Along with his recent series of hits, other investments include Widgetbox, CafePress, DocVerse, FanSnap, Lumos Labs, Polyvore, Doostang, BloomSpot and MocoSpace.

He invests in all these start-ups via an investment vehicle called Harrison Metal, which he runs with another former eBay exec, Erik Rannala.

Harrison Metal is named after John Harrison, the inventor of the marine chronometer, which allowed for accurate measuring of longitude. According to its Web site, it “invests in early stage, technology driven businesses led by exceptional entrepreneurs.”

While I had a delightful lunch with Dearing recently, at which he nicely managed to convince me not to give him the BoomTown video treatment, he also politely declined to be interviewed for this piece.

Thankfully, his investees did not decline, and quickly sent large bouquets of gratitude when I asked for comments about Dearing:

Aaardvark co-founder Max Ventilla:

“Michael was among the very first angel investors to get behind Aardvark and stayed critically involved until the end, providing whatever the Company needed. Dearing is an 11 out of 10.”

AdMob founder and CEO Omar Hamoui:

“MD is a great strategist and provided us with very thoughtful advice during some of the formative days of the company. It’s exciting to see him step more fully into the role of early investor/advisor with Harrison Metal.”

And, finally, Xoopit co-founder and CEO Bijan Marashi:

“Michael Dearing has the very rare skill of being able to quickly spot and render the core elements of strategy surrounding a project–the things that matter and those that don’t. In a matter of a few brush strokes, I’ve seen him help teams focus and evolve their activities into actions that generate tremendous value. Moreover, he’s a deep listener and an inspiring mentor. At Xoopit, he got behind the team and helped us stay on-point to our mission, which can sometimes be tricky for an ambitious startup in a big space.”

So, while he might not like the attention, Dearing is likely to be getting more if this record keeps up.

Rob Go wrote a sharp piece on Harrison and what he calls “Micro VC’s,” before the Aardvark deal–which I had not seen until someone on Twitter pointed it out to be, but which you can read here.

Yesterday, BoomTown asked a question on Twitter about what grade people thought I should give Yahoo CEO Carol Bartz for product innovation.

I began handing out marks to Bartz last week, after she gave herself a B- for overall performance for the year since she took over the troubled Internet giant.

But I decided to be more specific, splitting the grades for Yahoo (YHOO) in 2009 into five categories: Management, financials, product innovation, deal-making and moxie.

So far, I have given her an A- for management and a C+ for financials.

But I resorted to the lazy reporter trick of using Twitter, because I was torn when it comes to product innovation.

One main reason: Bartz inherited a company that has been suffering from a serious and chronic case of product constipation, after many years of leading the Web in new and innovative offerings.

In fact, from its amazing content products to its early attempts at personalization to its way-ahead-of-the-pack email to its cool design breakthroughs, Yahoo had always been the one to beat when it comes to the consumer Internet in Silicon Valley.

But that has decidedly not been the case for many years now, even as other key players have been very busy inventing some cool stuff.

Consider: Facebook with The Wall, News Feed, pokes and friending; Google (GOOG) with Chrome, Android and a plethora of major search innovations; Amazon (AMZN) with Kindle, Prime, EC2, S3; Twitter (the whole dang idea of it); and Apple (AAPL) with the iPod, the iPhone and, soon, the iPad–have you heard of them?

And–yes–even Microsoft has jumped in with a saucy new Bing search service in 2009, and it has been introducing features regularly, despite its weensie market share.

Product innovation also includes keeping a sharp eye out for new companies to snap up, and Yahoo used to do that, grabbing innovative start-ups, such as Flickr, Del.icio.us and many others.

But Yahoo made both of those purchases in 2005, and the entrepreneurs from those start-ups have since exited under a cloud.

In 2009, Yahoo made a few minor acquisitions, focusing instead on shedding and closing down former purchases it could not successfully integrate.

That kind of cleaning up is doubtlessly a good thing for Yahoo, and I did not think it completely fair to ding Bartz for a situation that obviously requires a lot of fixing, made even harder since there have been a lot of other issues to deal with at the company.

Nonetheless, as the year ticked on and other Web players marched ahead with all due speed into a range of new arenas, it has become increasingly worrisome to hear not a peep out of Yahoo or see any true spark of innovation, even as Bartz hired a passel of new execs, most of whom have more enterprise than consumer Internet experience.

While Yahoo did complete a significant overhaul of its homepage and launch a new marketing push, competitors such as AOL (AOL) and Microsoft did much the same.

As to the variety of key fixes across the site that should happen as a matter of course at any company, all of which were necessary–that’s great. But while Yahoo is in the midst of a brand revitalization, it simply does not get credit for keeping its existing properties properly updated.

Thus, my grade comes down to a C- in product innovation, since I cannot point to a single unique and striking innovation from Yahoo in 2009. Neither can I call its two very decent acquisitions–photo organization start-up Xoopit and Arab Internet portal Maktoob–game-changing in any way whatsoever.

My grade is better than the dozens of suggestions I got from readers in tweets, direct messages and emails, most of which rated Yahoo’s innovations effort of late at a D or D- grade (with one F–Hello, Keith R!).

Wrote one smart techie I know well, in a typical sentiment:

I’ll give them a D for product innovation. They have outsourced search to Microsoft. They made so many small, smart acquisitions over the years, but they killed them first and now looking to divest every one of them. They want to get into the social game, but have had Delicious, MyBlogLog, Upcoming for all these years and did nothing with it. They incubated Y! Pipes, same result.

And now their big game is social activity aggregation. They have the right assets–mail and messenger are still popular, news is still popular and they just renewed their deal with AP, users are still on Flickr, don’t agree with their home page strategy but with that and the Facebook Connect integration, Y! has the potential to know a lot about a user. They’d then be able sell targeted display ads for a premium, that Facebook has been (so far) reluctant to do. We’ll see how well they execute this year. I’m not very hopeful though. They have lost their product DNA.

We’ll have to see about that in 2010.

And, to be fair, Yahoo PR exec Sheila Tran respectfully disagreed with my assessment and sent me a cogent and well-argued email about how Yahoo did a lot better in this area than you might think, awarding it an A.

Here is her email in its entirety, so judge for yourself:

High-level Points

· Product innovation is not just about launching “new” products. We focused on continually innovating on our core/leading products/properties.
· Making these updates are key to our brand revitalization and core to our success moving forward.
· Other competitors may have updated some similar products this year but they don’t have the reach and leadership we have. Our updates in several areas such as the homepage, search, mail, mobile and messenger were differentiated from others.
· We have innovations that span across the consumer AND advertising experiences
· We’re focused on innovating globally ie launch of Meme

Product/Property

New Homepage

· In the US, we’ve seen a 12% year over year increase in UU’s on our homepage (Dec 08-09, comScore).
· The web is open and in 2009, Yahoo!’s homepage opened up, too. With the integration of the Yahoo! Application Platform and the new homepage (September 2009), we gave developers the ability to get in front of one of the largest daily audiences on the web.
· The new homepage takes the number of codebases from 33 to 1. The benefits of moving towards a single code base are many–faster time to market, less duplication of efforts, and a more robust technology platform to operate from, to name just a few.
· We expanded the use of our content optimization technology to the Today module, helping fill the page with more relevant and engaging content. While this isn’t always apparent to users, our content optimization algorithms work behind the scenes to help us fine-tune how we identify and display the most popular content. We are now testing how we can use the engine to help us personalize content to peoples’ interests–for example, if you’re a sports junkie we might increase the amount of sports news you see when you visit the Yahoo! homepage.

Mail
· Launch of open apps which is aligned with what we have done across the homepage and search.

Messenger
· Yahoo! Messenger has seen video instant messaging minute use grow 3x since its introduction last year.

Search
· Launch of SearchPad: online personal research assistance when people search. Only one that offers this
· Continued success with SearchMonkey and BOSS which resulted in a differentiated search experience on Yahoo! Search and outside of Yahoo!
. BOSS: more than 30 million queries a day
. SearchMonkey: live in more than 23 markets, more than 70 million enhanced searchmonkey results are viewed daily
· Launch of the new search results page: open apps, blended results, 3 column look and feel which google then announced, enhanced results with search monkey
· Launch of video and image search refiners: no other competitor has taken our approach which really provides a more relevant experiences for people.

Artist Pages
· Launch of the artist pages consumer experience that aggregates the best music products, services, information, and content the Web has to offer about more than 500,000 artists. Pulls together “best of the Web” music products such as iTunes, Amazon.com, Last.fm, Rhapsody, Pandora and others in one place.

Connected TV
· In 2009, Yahoo! revolutionized the TV experience by making the connection between TV viewing and the Internet a reality and signing distribution partnerships to embedding the Yahoo! Widget Engine directly in TVs from Samsung, Sony, LG and Vizio.
· In 2010, we continue to expand partner distribution globally (new partnerships with Hisense, MIPS, Viewsonic and Sigma), and move beyond the TV (into set top boxes, blu-ray players and more.) We also opened the WDK and introduced new Widgets providing users with thousands of content channels.

Mobile
· New Y! Mobile Homepage–33 countries across 1,900 devices; tighter PC to mobile synergies (http://m.yahoo.com)
. Over the past two years, we have seen the usage of our homepage more than triple – globally. (Yahoo! Internal Data)
· Adds voice search for iPhone and increases availability across other mobile devices
. Emerging markets are a key growth driver; for instance, in Indonesia we see nearly twice as many more mobile search users than we do on the PC. (Yahoo! Internal Data)
· iPhone / BlackBerry Apps for Yahoo! Finance, Yahoo! Fantasy Football and Flickr (iphone only, as there was already a BB app for Flickr)
· New Y! Mobile Homepage for US Hispanics
· Continue to sign strategic partnerships for leading mobile services, including Chunghwa Telecom and o2 Germany (mobile search, displacing Google)
. We have over 100 mobile operator and OEM partnerships around the world.

Advertising
· Rich Ads in Search: Most innovative way to bring display benefits to search and launched before any other search engine could have.
· Search Retargeting: Yahoo is the only media company that can leverage display and search effectively, as such Search Retargeting (uses a recent search query to serve up a relevant display ad) is something only we can do and do well.
· Innovative Strategy: Right Media going upstream. We have the largest ad exchange, in 2009 we decided to make it all about premium to have our exchange community be more appealing to big brands and publishers.

Acquisitions
· Xoopit–2008 Hack day winner. Brings phenomenal photo organization, improved photo sharing, and the serendipity of discovering forgotten photos to Yahoo! Mail.
· Maktoob–Acquisition accelerates Yahoo!’s strategy of expanding in high-growth emerging markets where we believe Yahoo! has unparalleled opportunity to become the destination of choice for consumers.

[The C- photo is from Yahoo's still-terrific Flickr.]

Yahoo confirmed the news–first reported by BoomTown and in The Wall Street Journal last night–that it was buying Xoopit, the San Francisco-based social email company.

And it did so in both a blog post and on Twitter, as you can see here:

@karaswisher @jvascellaro Your scoops confirmed http://bit.ly/gpOT2

Well, thanks! But we are already onto new scoops, so try to keep up!

The price for the acquisition, which Yahoo (YHOO) did not reveal, was about $20 million, according to sources.

In its blog post, titled “Xoopit + Yahoo! Mail = Moving beyond that massive digital shoebox,” Yahoo’s SVP of Application Products Bryan Lamkin wrote, in part:

With the integration of Xoopit’s platform technology and capabilities, the task of sending photos via email will be as easy as it should be and sharing photo albums with friends and family members will also be a cinch. You’ll be able to share your pictures among a group of friends or family like never before–combining pictures from numerous sources into a single album for a private group to view. And soon your inbox will become an organized photo index as well. Just imagine having a tool that collects all the photos you’ve sent and received over the years into that scrapbook you’ve never had time to assemble.

In short, Xoopit will bring phenomenal photo organization, improved photo sharing, and the serendipity of discovering forgotten photos to Yahoo! Mail.

Why is this such a big deal? Yahoo! Mail is actually home to one of the largest online photo repositories in the world. And every day, millions of you use Yahoo! Mail as your primary way to share the photos of important moments in your lives. While social networks and community sites are great for sharing photos with everyone you know, we realize it’s not for everyone or every occasion. For many, email is still best for sharing photos among a more select group of friends or family. And now we’re making it all that much easier for you.

Xoopit finds photos, videos, links and other files in email so that users can surface and then share them on many sites, such as social networking giant Facebook. It also has other products that essentially enliven email.

Xoopit’s investors–Accel Partners and Foundation Capital, along with several angel investors–have pumped about $6.5 million into the company since 2006.

As I previously reported, sources said Yahoo was first impressed with its innovative plug-in that works with Gmail from Google (GOOG), and has been looking at the company for a while, previously offering about $10 million for it.

Xoopit also makes a similar photo-sharing application for Yahoo Mail, which it launched late last year.

The opening up of its popular email product to a variety of third-party applications in order to make it more robust has been a goal of Yahoo recently as it seeks to socialize one of its most popular products.

Interestingly, in the Yahoo blog, Lamkin said Xoopit was Yahoo Mail’s most popular third-party app.

Here is a screen shot of Xoopit in action in Yahoo’s email offering (click on the image to make it larger):

Yahoo plans on announcing Thursday that it has bought Xoopit for a price in the $20 million range, according to several sources, one of its first acquisitions in a long while.

Reached late this afternoon by BoomTown, a Yahoo (YHOO) spokeswoman declined to comment about the acquisition. Xoopit did not respond to emails earlier today.

But sources said it was a done deal to buy the San Francisco-based social email start-up that finds photos, video, links and other files in email so that users can surface and then share them on many sites. It also has other products that essentially enliven email.

Xoopit’s investors–Accel Partners and Foundation Capital, along with several angel investors–have pumped about $6.5 million into the company since 2006.

According to sources, Yahoo was first impressed with its innovative plug-in that works with Gmail from Google (GOOG), and has been looking at the company for a while, previously offering about $10 million for it.

Xoopit also makes a similar photo-sharing application for Yahoo! Mail, which it launched late last year.

The opening up of its popular email product to a variety of third-party applications, in order to make it more robust, has been a goal of Yahoo recently, as it seeks to socialize one of its most popular products.

One source said Xoopit was a good fit for Yahoo because it allowed the company’s email to be the platform that could knit together other social networking services, such as Facebook. This is seen as a core feature, although the Silicon Valley-based company is also opening its email products up to outside developers.

Yahoo has been planning on announcing the acquisition on Thursday at Fortune magazine’s Brainstorm Tech conference, where SVP of Applications Products Bryan Lamkin is appearing on a panel titled, “Dollars & Demographics: Capitalizing on Demographic Trends.”

Lamkin, a former Adobe Systems (ADBE) exec, now runs the Yahoo unit that includes email and other communications and communities products. He was hired in April by CEO Carol Bartz.

That panel topic is a little ironic, several sources joked, since Xoopit is not profitable and has very small revenues thus far.

The Wall Street Journal also reported on the deal, although it said Yahoo and Xoopit were still in late-stage talks and the deal was not complete yet.

But, according to my sources, it is done.

Here’s a video interview I did yesterday at the San Francisco event where Yahoo finally launched a lot of the new open and social elements that it has long said it was injecting into its most popular products.

BoomTown talked with the key movers of the initiatives: Ash Patel, Yahoo’s EVP of its Audience Product Division, and Tapan Bhat, its SVP of its Front Doors, Communities and Network Services.

(You can see screen shots and an official Yahoo video of the new features here.)

The initiatives Yahoo (YHOO) finally released into the wild have been long in the making, first discussed as just vaporware by Yahoo CEO Jerry Yang at last year’s Consumer Electronics Show in Las Vegas (see that video below too).

Yahoo also hosted a session at its Sunnyvale HQ about its open plans in the fall.

And, after the longest of gestation periods, they arrived yesterday, in an impressive rollout.

The changes include some very deft rejiggering of Yahoo Mail, called a “smarter inbox,” with a new dashboard welcome page, easier ways to make connections, more filtered views, updates and third-party apps integrated into the application.

I thought the changes to the mail product were the most interesting, especially given the hundreds of millions of people using the product. It’s an interesting choice for a social entry point, aiming to give nonsocial-networking types enough of a taste of it without inundating them.

Of particular note were the third-party applications, such as for WordPress and Flickr, that launch nicely right in the email program.

Also cool was one app from Xoopit that surfaces old photos and photo links lost in the musty archives of old emails.

Yahoo also debuted an enhanced version of the homepage (previously announced in September) and My Yahoo, as well as a new toolbar and socialization elements added to its popular media properties.

It remains to be seen how popular these changes will become, especially since many consumers already have their social-networking lives on Facebook or MySpace.

In addition, both Time Warner (TWX) online unit AOL and Microsoft (MSFT) have rolled out similar social and open changes to their sites recently, making it super-confusing for everyone.

But, better late than never, I always say, so here’s Bhat and Patel talking about Yahoo’s new stuff.

I had to load the video onto YouTube, as Brightcove had snafus (also below is Yang talking about the concepts at CES in January 2008):

Tapan Bhat and Ash Patel

Jerry Yang at January 2008 CES

(BoomTown interviewed top Yahoo execs Tapan Bhat and Ash Patel about the moves here.)

For a look-see, here is a Yahoo (YHOO) video about the launch and some screenshots of the changes (click on the images to make them larger):

Yahoo’s Official Video on Open and Social Launches

Yahoo Mail Main Page

Yahoo Mail Inbox

Xoopit in Yahoo Mail

Toolbar Notifications

Media Integration in Yahoo TV site

Open Applications

“By tying together our audience and context, we can have even more relevant experiences,” said Tapan Bhat, senior vice president of Front Doors and Network Services at Yahoo (YHOO). “All our properties are going to be socialized…and fundamentally, it is going to change how information is consumed.”

The now-socialized Yahoo Mail is to go live today at 1 p.m. PST. My Yahoo, the Yahoo Toolbar, Yahoo TV and Yahoo Music go live later this week.