Data Sheet—Monday, February 1, 2016

The executive branch’s No. 2 diplomat, Deputy Secretary of State Antony Blinken, visited town last week. His mission was twofold: Find out what tech companies see that State ought to and establish a local presence for the department. “We want to know what’s coming around the corner,” says Blinken, a veteran Democratic staffer on Capitol Hill who held White House positions in the Clinton and Obama administrations. The State Department needs to be abreast of technology that could aid everything from arms-control monitoring to educational techniques to help young refugees.

To establish State’s beachhead in Silicon Valley, the administration dispatched a young strategist named Zvika Krieger. State’s new ambassador to Techlandia is a fan of design thinking and other uses for Post It notes who previously worked for the current secretary of defense, Ash Carter.

It’s unclear how much State can accomplish in Silicon Valley, especially considering the now-less-than-one-year “sell by” date on Blinken’s tenure. (He’ll depart when President Obama does.) That said, it’s good he’s making the effort. With itinerary assistance from the venture capitalist Chamath Palihapitiya, Blinken met last week with the usual heavyweights, including Google, Facebook, Amazon, and Microsoft. Nonprofits also attended a State-sponsored workshop at Stanford University aimed at discussing topics including how distance learning could help displaced children. These nonprofits included the Middle East Children’s Institute, the International Rescue Committee, and the UN Refugee Agency. Brokering a meeting between these groups and well-endowed tech titans is valuable diplomacy indeed.

Blinken was part of the administration delegation that visited Silicon Valley three weeks ago to discuss technological ways to fight terrorism. “We have 80,000 sensors out there,” he says, referring to State’s workforce and the potential to marry old-fashioned data gathering with high-tech’s algorithmic expertise.

State’s second-ranking executive, who served briefly as a diplomat in his youth, even recognizes the opportunity to recruit professionals in Silicon Valley, an aspirational program that aims to be more systematized. “People want to be part of something bigger than themselves,” Blinken says. So true.

BITS AND BYTES

U.S., E.U. fail to reach data-sharing deal. Negotiators still disagree on how to swap private citizens' information—such as a person's financial profile or social media activity—across the Atlantic Ocean. The previous rules governing these transfers, the so-called Safe Harbor agreement, was ruled invalid last year. European privacy regulars are eager to limit the U.S. government's access to this data and more clearly define legal recourse. Expect European privacy regulators to say more on the matter by Wednesday. (New York Times)

What to expect from Alphabet's earnings report. The tech-company-formerly-known-as-Google lost between $1.5 billion and $2.3 billion last year on its "moonshot" research, according to analyst estimates ahead of Alphabet's 2015 financial report on Monday afternoon. This is the first time the holding company will provide detailed results for the diverse portfolio of interests that sit outside its core Internet search business, such as driverless cars, smart homes, or healthcare applications. Analysts are calling for overall fourth-quarter revenue of $21 billion. (Reuters, Wall Street Journal)

Apple invests in augmented reality expertise. In recent months, Apple has hired more than 100 specialists in next-generation "immersive" computer interface technology, according to several news reports. Its latest investment: Flyby Media, a startup that specializes in image recognition. Flyby was involved in Google's Project Tango three-dimensional mapping initiative. (New York Times, Wall Street Journal)

Nokia settles Samsung patent dispute. After the Finnish telecommunications company sold its handset business to Microsoft, it retained the rights to an expansive patent portfolio—one worth about $870 million in annualized revenue this year. The Samsung deal covers a five-year period starting back in 2014, but analysts were expecting better terms. (Reuters)

White House proposes $4 billion for K-12 computer science classes. Data suggests just 25% of U.S. elementary schools offer worthwhile curriculum that could prepare children for careers in technology—while 22 states don't allow these classes to count toward graduation credit. President Obama's plan would provide more aid to states and districts that make this education a priority, especially for girls and minorities. (Fortune, New York Times)

You can also blame the dollar. Unfavorable currency exchange rates were a negative factor in the most recent financial results for Apple, Microsoft, and IBM. The impact was especially hard on Apple—the strong dollar cost it almost $5 billion in revenue last quarter. You can expect to hear a similar refrain from Google when it discloses results after the U.S. market close on Monday. (New York Times, Fortune)

THE DOWNLOAD

Show and tell: Inside MasterCard's marketing command center. For hours each day, members of MasterCard’s marketing team huddle in an open-plan office and watch money disappear before their very eyes. Not literally, of course. At the company’s Purchase, N.Y. headquarters, product managers gaze at a 40-foot display that broadcasts feeds, visualizations, and performance metrics for more than 60 markets. When they want to dive deeper into the data, they retreat to Insights Alley, a clutch of casual lounges with 55-inch touch screens. And when they want to watch narratives unfold, they visit the Real-Time Marketing Lab, where eight more displays—nearly an entire wall’s worth—highlight trending stories. Learn more about the financial services giant's "Conversation Suite" by clicking here. (Fortune)

IN CASE YOU MISSED IT

Here's the problem with trendy e-commerce businesses by Erin Griffith

Square makes its first acquisition since IPO by Leena Rao

Why IBM is buying a digital marketing agency by Heather Clancy

IBM finishes Weather Company deal, adds another former CEO to Watson team by Barb Darrow

GM is using the cloud to connect its factory robots by Jonathan Vanian

Apple bought this company to stay strong in schools by Jason Cipriani

Inside Uber and Lyft's Texas showdown about fingerprints
by Kia Kokalitcheva

Why Apple is still a 'buy' by Philip Elmer-DeWitt

Salesforce's Marc Benioff cheers Obama's new equal pay measure
by Claire Groden

Here's how much Google paid to get google.com back by Jen Wieczner

Tech's hot new trend: Networking at 35,000 feet by Sheila Marikar

ONE MORE THING

Here's a novel way to eliminate data center cooling costs: put them under water. Microsoft is testing a design concept, called Project Natick, that would operate hundreds of feet below the ocean surface. (New York Times)

This edition of Data Sheet was curated by Heather Clancy: