MediaFile

There’s a lot to unpack in Yahoo’s reported $1.1 billion deal for Tumblr, but much of the reporting today is focused on the rather bland challenge of turning Tumblr into a profitable company. Forcing Tumblr to make money will eventually become an important mission for Yahoo, but for now it’s far from the point.

This deal’s most pressing issue isn’t what will come of balance sheets, it’s what will come of each organization’s corporate culture. Marissa Mayer has promised, in her post on the deal, “not to screw it up.” She’s talking about Tumblr. But that’s just Mayer’s very smart way of inverting what she must be hoping Tumblr becomes for Yahoo: a threat to its older, established, some might say calcified culture that has been short on innovation, creativity and user-focused design for many years now. Tumblr, indeed, will be far from “screwed up” as it gets used to its new home under Yahoo. Tumblr seems to have a bright future as something like a design lab and an already-functioning charter city under the aegis of the Yahoo brand. It will be, and already is, something Mayer will point at to tell her team, “why don’t you do it that way?”

When Mayer was at Google and led all product management and design efforts, she famously relied on data about user behavior to inform her “design” choices for Google’s products. At the time, some argued that her method of, for example, choosing one shade of blue over another because it made users fractionally more likely to click wasn’t really design at all.

Tumblr has, in some important ways, already been living by this design by data principle long espoused by Mayer. Most importantly, Tumblr is not trying to offer products to its community by throwing nonsensical new portals and features and widgets at them, the way Yahoo has for years. Rather, it’s given its community a platform, staying out of the way when it comes to all but the most fundamental underpinnings of the site. Sure, it’s got lots of handy defaults for new users, but ultimately Tumblr is whatever its users want it to be, and it’s different for every user. That’s precisely why so many different types of communities, from design bloggers to GIF makers to bored high schoolers, live on Tumblr, and why Tumblr doesn’t have to overtly try to attract new users–its platform is already doing the job.

The Tumblr-Yahoo deal isn’t about two tech companies linking up to share strengths. It’s about two entirely different ways of doing business being pitted against each other to do battle in the meeting and boardrooms now controlled by Mayer and her trusted deputies. It’s pretty clear what camp Mayer will likely favor, given that she came from the company that helped kill an earlier iteration of Yahoo. The problem is that Yahoo’s portal/agency/sales-culture DNA is still in many pockets and products across the company, however dormant. So, possibly, is Yahoo’s propensity for killing or starving to death its acquisitions, as it did with an earlier generation of once-promising startups. (Hello Delicious! Hello Flickr!) By making such a strong oath to Tumblr, Mayer is basically throwing down a challenge to her team to move forward or get left behind.

It is one of the oldest and thorniest questions of the digital music era: How much should artists and musicians be compensated for the Internet broadcast of their songs? And who gets to decide that rate?

You might think in the nearly two decades since music first began streaming over the Internet that some kind of consensus about paying artists would have emerged. But about the only thing most Internet radio stakeholders can agree on is that the current system makes no sense: Internet radio providers pay vastly different rates than their terrestrial, cable and satellite brethren, and even sometimes each other. Also, even a single company may pay a per-song fee in some cases, and a percentage of its revenues in others. Beyond that, there is vast disagreement, with the political fault lines forming an unusual pattern.

The business stakes of this battle flared up again this week, when the New York-based indie musician Blake Morgan picked a public fight with Internet radio giant Pandora. Morgan had received a feel-good form letter from Pandora founder Tim Westergren that exhorted musicians “to change the course of the industry in a direction that will be far more inclusive and empowering for independent musicians.” In response, Morgan said the “idea that Pandora is intimately interested in the success of independent artists rings quite hollow.” Specifically, Morgan noted that his songs were played nearly 28,000 times on Pandora in the third quarter of 2012, and that he received $1.62 from the company. (As Billboard notes, that is far less than the statutory rate to which Morgan is theoretically entitled.)

The Samsung Galaxy S4′s tagline — “The next big thing is here” – is a telling pitch. The Galaxy is the world’s second best-selling phone, behind the iPhone.  And the latest version unabashedly claims that bigger is better. But considering the S4 in a different light, maybe we shouldn’t think of it as a big phone. Maybe we should treat it like a very small tablet and leave our real tablet home.

While narrower than Samsung’s Galaxy Note by about a half-inch, the S4 strongly evokes a miniature but very serviceable tablet. And since making calls is one of the things we seem to do least with our phones, marketing a connected device like the S4 as a very small tablet that also makes calls might not be a bad idea.

As a “tablet,” the S4 delivers. Screen resolution is amazing.. It runs fast and smooth, which is not a given when you don’t own both the hardware and software. The S4 runs the latest version of Google’s Android mobile operating system, Jellybean 4.2.

Nest Labs is scaling fast.

The Silicon Valley company formed by Apple alums Tony Fadell and Matt Rogers, who helped build the consumer gadget giant’s iPod and iPhones, has acquired  Boston-based startup MyEnergy. The fledgling company helps homeowners understand their total energy use by presenting and analyzing all their electric, gas and water usage over certain time periods, and comparing it to other other homes in the neighborhood.

MyEnergy, which has been working with utility Minnesota Valley Electric Cooperative, will help Nest in its push to form partnerships with other utility companies to get the power-saving “Nest” thermostat into more U.S. households. 

Nest recently teamed up with six utilities to provide consumer incentives for the use of its thermostats.

Not so long ago Blackberry made phones that set the bar. They were avatars of serious cool among the power set, a visible token that you had arrived. Then came the iPhone, and there went Blackberry’s cachet.

Now Blackberry is back with a two smartphone phones running a new operating system — both the phones and the OS are dubbed “10.” The rebooted line is a gambit — some think Blackberry’s last — to recapture the cool.

The Z10, released in the United States in March, was an attempt to join ‘em: it’s a full screen, multi-touch rectangle with a pop-up, software keyboard — sound familiar? But the Q10, due in the U.S. at the end of May, is a spit-in-your-eye attempt to beat ‘em: An unapologetic central feature is a physical keyboard, and this defining Blackberry touch makes the device an  intentional outlier in the smartphone world.

In my tech predictions of 2013 I somehow missed that this would be the year of the smartwatch. But now the most established names in tech are realizing the future may be all in the wrist.

Smartwatches are shaping up to be the Next Big Thing about a decade after they were offered to the public and met with a collective shrug. Timing can be everything in tech. Microsoft marketed a stylus-enabled PC in 2001, but the tablet concept was a nonstarter until the iPad. Even the e-reader had a first life as The Rocket — before the dot-com boom. But it was Amazon, in 2007, that reimagined the device and took the brass ring.

There is still essentially no smartwatch market, but at least one analyst is asserting that more than a million could be sold this year. That astonishing — and dubious — claim would amount to one-third of the anticipated 2013 sales of netbook (which I did predict would surge in 2013).

Below is an unedited transcript of the video interview I conducted with Fred Wilson of Union Square Ventures:

PAUL SMALERA, Technology Editor Reuters.com: Today I had a great chat with Fred Wilson of Union Square Ventures. Check it out.

Let’s start with Bitcoin. It’s captured the imagination of tech blogs, there’s been a big price spike, dozens of posts all over the internet. And your own blog is full of savvy readers; I was reading through the comments on it. One of them said, ‘I haven’t even followed Bitcoin because I don’t really understand it quite frankly.’ Can we start there? Can you just tell us from your point of view what Bitcoin is?

This week Fred Wilson of Union Square Ventures sat down with me for a video interview (part of Reuters' Tech Tonic: Interface series) to talk about a wide variety of topics: Bitcoin, wireless spectrum auctions, Airbnb, immigration, the New York City mayor's race, even his wife Joanne (the Gotham Gal), and a few others. Why so many topics? Fred’s simply one of the most thoughtful technology investors working today, and peppering him with as many different questions as possible can help us learn how he thinks.

Fred often cites “pattern recognition” as the main job of a venture capitalist, and I think I got a pretty good sense of Fred’s pattern: he understands the mechanism behind a company or technology, and figures out whether his firm can help that company grow. In this interview, he's an insightful and persuasive defender of the interests of the tech industry, because he very sincerely believes in its ability to do good for people.

Do you think Fred's take on technology's promise is accurate? Watch and share the interview and let me know in the comments.

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

‑ Winston Churchill

These are tough times for the personal computer: The 30-something device that everyone used to covet is being crowded out by younger objects of our affection. Time for a makeover.

Visionaries like Microsoft’s Bill Gates and Apple’s Steve Jobs started a revolution by imagining that computers — at the time, massive, room-filling machines that basically just did arithmetic — could become indispensable tools for the masses. PCs led to a world filled with powerful electronics we could take anywhere: Desktops became laptops, phones became mobile and then smart. And now there are tablets.

It hasn’t yet been six years since the start of the smartphone revolution and we’ve already become an “always on” culture. At least, that’s the temptation. Those who submit can be called The Immersives: checking e-mail, keeping tabs on Facebook “friends,” debating on Twitter, snapping photos of food for Instagram. It would be rare if any of us didn’t have at least one toe dipped in the stream.

We are all Immersives sometime: We bury our faces in the small screen while we walk, or come dangerously close to driving blindly into traffic. We can’t get through a meal without virtually leaving the table. We keep our phones on permanent silent to conceal the depth of our addiction. If we even momentarily lose track of our phone, we are as anxious as new parents whose toddler has dipped out of sight.

Immersives are the target audience for Facebook Home, a new version of the social network’s app that was announced this week. Home lives on the front side of the lockscreen — it’s the first thing you see when you pick up the phone. It’s a major release that reveals the extent to which Facebook needs us to stay Immersives to help it meet its bottom line. This decade’s major technological question is:  Who’s in control — our phones, or us?