Mark Zuckerberg accused the US government of bad PR, saying it failed to communicate the balance of security and economic interests behind its internet surveillance efforts – in turn creating a massive PR problem for Facebook.

“I think the government blew it,” he said at the TechCrunch Disrupt conference in San Francisco on Wednesday. “It’s my job and our job to protect everyone who uses Facebook and the information they share with us. It’s our government’s job to protect all of us and also to protect our freedoms and protect the economy and companies. And I think they did a bad job of balancing those things.” Read more

Federal judges evaluated the privacy and free speech implications of a California law that would create a database of online identities for sex offenders, noting the shift in public sentiment around such data collection since voters passed the law last November and today, as revelations about the US’s monitoring of online communications continue to emerge.

“We’re living in a post-Snowden world,” said Judge Jay Bybee of the Ninth Circuit Court of Appeals on Tuesday, referencing the surveillance practices revealed by former CIA contractor Edward Snowden and questioning whether a database of email addresses and online identities intended to help solve sex crimes could be used to monitor people’s political speech.

Mr Bybee was one of three judges hearing oral arguments in a case about Proposition 35, the California law that requires convicted sex offenders to register their email addresses and user names for online news sites and social networks. The initiative was passed by a majority of voters last November, after receiving financial backing from Chris Kelly, Facebook’s chief privacy officer between 2005 and 2009. Read more

Facebook will report second quarter earnings on Wednesday, with Wall Street expecting $1.62bn in revenues and 14 cents earnings per share.

Analysts will be looking for signs of increased advertising spending among small businesses and in international markets, as growth from large US advertisers is believed to have levelled off. Read more

Facebook launched its own Twitter-style hashtag system in an attempt to bolster its fledgling search feature, and raise a challenge to its rival social network that pioneered the use of the # symbol in online communications.

Introducing the marker to Facebook posts will help the company organise comments around certain celebrities or real-time events, like sports games, concerts, or television shows. This way users can search for what other people are saying about the same topic, and advertisers could target ads against real-time trends. Read more

A New York man who rented his apartment through Airbnb was found to have violated the city’s residency laws, marking the first legal setback for the peer-to-peer home rental start-up as it faces a growing number of regulatory questions.

An administrative law judge ruled that Nigel Warren had broken a 2010 New York City law when he accepted about $600 from a Russian tourist to stay in his apartment for a few days while he was out of town. The law prohibits apartment owners from renting property for less than 30 days, and was intended to crack down on landlords who bought affordable housing units and then converted them to hotels to make more money. Mr Warren was fined $2,400. Read more

African-American teenagers are more likely to use Twitter than their white counterparts, according to a study out today from the Pew Research Center.

Researchers noted a significant jump in Twitter use among teens in general, but found that 39 per cent of African-American teens used the microblogging site compared to 23 per cent of white teens. Read more

Wall Street is anticipating another positive earnings report from Facebook after markets close on Wednesday and the social network states first quarter results.

Analysts expect to see a bump in revenues from advertising products launched last year, and hope to hear plans for future ad products, in particular, video advertising and ad plans for Facebook Home, the new super app Facebook launched for Android phones in April.

Though business in the first quarter tends to slow compared to the preceding quarter, which included the holidays and the US presidential election, analysts are expecting 36 per cent revenue growth year on year. Consensus estimates are for 13 cents in earnings per share on $1.44bn in revenue. Morgan Stanley predicts mobile advertising revenues will be $314m for the quarter, representing 25 per cent of overall advertising revenues, up from 23 per cent in the last quarter. Read more

Andreessen Horowitz is helping to put Silicon Prairie on the map of wanna-be tech hubs with its latest investment in the Des Moines, Iowa-based start-up, Dwolla.

The young internet payment network attracted $16.5m in a Series C round, led by Andreessen, with previous investors Village Ventures, Thrive Capital, and Union Square Ventures joining.

While setting up shop in the mid-western United States leaves the company far away from the investors and talent pools on the West and East Coasts, there are benefits to building a business in a less saturated market. Read more

Microsoft has closed a patent licensing deal with ZTE, one of the top five manufacturers of Android smartphones.

The deal is Microsoft’s first with a leading Chinese company, marking an important milestone in the software giant’s multi-year campaign to squeeze licensing revenues out of smartphone vendors and manufacturers.

“Experience has taught us that respect for intellectual property rights is a two-way street,” said Horacio Gutierrez, general counsel for Microsoft, “and we have always been prepared to respect the rights of others just as we seek respect for our rights.” Read more

Foursquare’s future is veering toward e-commerce, as the company’s social media roots have failed to yield revenues strong enough to excite investors.

What began as a virtual social competition for clocking the most “check-ins” at local restaurants and coffee shops is evolving into a play for a cut of local retail business.

“Twenty per cent of Foursquare check-ins are happening at retail locations, like clothing stores and shoe stores,” said Dennis Crowley, Foursquare’s chief executive and co-founder. Read more

If I didn’t already obsessively look at my phone in search of distraction, while waiting for the train or a friend who’s running late, Facebook has just made it ten times easier to get a quick fix.

With the new Facebook “Home” for Android, photos and status updates from my Facebook newsfeed will be the first thing I see when I pick up my phone. (I’ll have to explain the demotion to my cat, Lucas, whose yellow eyes will no longer stare up at me from the screen on first swipe).

Instead, a rolling stream of photos passes over the screen as they are being uploaded and posted by friends. If I want a closer look, I just tap once. One more tap and I can see who Liked or commented on the photo, or type a comment myself. Read more

Apple has bought WifiSlam, an indoor mobile location service, as the Silicon Valley giant continues to compete with Google in mapping capabilities.

The deal closed recently for $20m, according to a report by the Wall Street Journal, citing an unnamed source.

WifiSlam’s technology uses ambient wireless signals that are already present in buildings to pinpoint the location of smartphones, as opposed to the space-based satellite signals relied upon for larger-scale GPS mapping and navigation systems. Read more

Publishers may take a cue from the software industry as they regroup from a decisive loss in the US Supreme Court over copyright rules.

After failing to persuade the justices to protect their foreign-made titles from resale in the US in the Kirtsaeng v Wiley case, publishers must instead rethink their international business practices.

While traditional publishers of books, music, and film have generally viewed the computer industry as a foe in various policy battles, it could find a saviour in borrowing its concept of software licensing agreements and applying them to physical goods. Read more

The hashtag has already found its way into real-life conversations. Similar to airquotes, some people – mostly young – form the square number symbol (#) popularised on Twitter with their index and middle fingers as they talk, to make a humorous or sarcastic point, or reference a cultural meme.

Now Facebook may want to claim the hashtag for itself. Read more

As iPhones and iPads have become normal accessories for upper middle class professionals, so too have new and hand-me-down cellphones and tablets become essential school supplies for their children.

Teachers have responded to the trend, incorporating the gadgets into their daily lesson plans. But that is widening the educational gulf between students and schools that can afford to keep up with the latest digital technologies, and those who cannot, according to a new report.

A survey of 2,500 US middle and high school teachers by the Pew Research Center’s Internet & American Life Project revealed 52 per cent of teachers in upper-income schools say their students use their personal cell phones in class to look up information and complete assignments, compared to 35 per cent in low-income schools. Read more

Blake Ross, a director of product at Facebook, has signalled his departure from the company, adding his name to a growing list of employees to decamp in the months after the social network’s botched initial public offering.

Mr Ross offered vague plans for his next steps in a post on his Facebook page: “It’s just time for me to try new things,” he said. Read more

There is an empathy gap in technology development. In the analytic, data-driven world of Silicon Valley, emotions often do not get factored into the latest product design.

This comes down to the way engineers and technicians think, says Anthony Jack, the director of the mind, brain, and consciousness lab at Case Western Reserve University in Cleveland, Ohio. The more people exercise the analytic functions of their brains, the less empathetic they become. Likewise, when we empathise, we turn off the analytic function of the brain.

“There is a cognitive tension between these two different types of understanding,” he said. Read more

Twitter co-founder Evan Williams is building his current start-up with a completely different business – and spiritual – structure in mind.

The freewheeling, non-hierarchical organisation popular in Silicon Valley technology companies is not the order of the day at Obvious Corporation, the re-launched incubator and web publishing platform Mr Williams founded with comrades Biz Stone and Jason Goldman in the pre-Twitter days.

“People romanticise start-up culture,” he said, speaking at the Wisdom 2.0 Conference in San Francisco on Friday. “People think: Freedom! No job descriptions! Damn with the rules! Actually, it creates tons of anxiety and inefficiency.” Read more

Pinterest, the fast-growing online scrapbooking site, has raised $200m, valuing the three year-old company at $2.5bn.

The San Francisco-based company is adding to its unconventional list of investors with this financing round, rather than turning to the Silicon Valley venture capital firms that typically lead investments for a company at this stage of growth.

The latest round was led by Valiant Capital Management, a hedge fund in San Francisco founded by Christopher Hansen, who is better known for his attempts to bring an NBA basketball team back to Seattle than his technology bets. Read more

Sailthru, a start up that is trying to make “smart data” out of “big data,” has raised $19m in a Series B investment round led by Benchmark Capital.

This is the second investment to close in as many days for Benchmark, which led a $13.5m Series A fundraising round for Snapchat, the ephemeral social networking service that lets people post photos or messages that self-delete after 10 seconds or less. That company is valued between $60m and $70m. Read more