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Bus<strong>in</strong>essWITH<br />

F<strong>in</strong>d<strong>in</strong>g<br />

privacy <strong>in</strong> a<br />

public arena<br />

Bits<br />

Sunday sales<br />

slip at pet<br />

U.K. paper<br />

of Murdoch<br />

JENNA WORTHAM<br />

NEW YORK Some friends were gush<strong>in</strong>g<br />

recently about a new mobile application<br />

called Pair, <strong>in</strong>tended for people <strong>in</strong> a<br />

relationship.<br />

Initially, I did not see the appeal of<br />

the app, which lets the two partners<br />

send messages and photos back and<br />

forth. First, the idea of add<strong>in</strong>g another<br />

service to the daily rout<strong>in</strong>e of Twitter,<br />

Facebook and their ilk seemed exhaust<strong>in</strong>g.<br />

And would not it be just as easy to<br />

exchange e-mails, text messages or,<br />

better yet, just flirt face to face?<br />

Curious, I tried it — even though I’m<br />

s<strong>in</strong>gle. I recruited a friend to help me<br />

test it. And after a few hours, the app<br />

started to grow on me. Someth<strong>in</strong>g was<br />

thrill<strong>in</strong>g about the secret little notes<br />

that Shaun, my temporary beau, and I<br />

sent to each other throughout the day.<br />

<strong>The</strong> secrecy was welcome. We were<br />

not clutter<strong>in</strong>g up anyone else’s feeds on<br />

Twitter and did not have to worry about<br />

random high school<br />

<strong>The</strong><br />

friends see<strong>in</strong>g and<br />

comment<strong>in</strong>g on our<br />

comb<strong>in</strong>ation<br />

exchanges on Facebook.<br />

In addition,<br />

of privacy<br />

and <strong>in</strong>timate there were gestures<br />

shar<strong>in</strong>g has dist<strong>in</strong>ct to the app. It<br />

never looked let us share <strong>in</strong>formation<br />

about our loca-<br />

so good.<br />

tions and exchange<br />

doodles, to-do lists<br />

and virtual nudges — all convey<strong>in</strong>g that<br />

‘‘I’m th<strong>in</strong>k<strong>in</strong>g about you.’’<br />

<strong>The</strong> app highlights the best elements<br />

of social network<strong>in</strong>g — the warm, fuzzy<br />

feel<strong>in</strong>g of be<strong>in</strong>g connected to people<br />

you care about when you are physically<br />

nowhere near them. And it says it elim<strong>in</strong>ates<br />

some of the worst — the worry<br />

about who can see the content you’re<br />

post<strong>in</strong>g and how they may <strong>in</strong>terpret it.<br />

Apparently, venture capitalists also<br />

see the po<strong>in</strong>t: <strong>The</strong> company that developed<br />

Pair raised $4.2 million <strong>in</strong> seed<br />

f<strong>in</strong>anc<strong>in</strong>g from a group of early <strong>in</strong>vestors<br />

last month.<br />

Pair is arriv<strong>in</strong>g as many of us are<br />

look<strong>in</strong>g to use the Web and our phones<br />

much as we always have, but outside of<br />

the very public arenas of the social<br />

Web. It is a natural evolution of social<br />

network<strong>in</strong>g, especially as Facebook<br />

and Twitter have swelled.<br />

<strong>The</strong> comb<strong>in</strong>ation of privacy and <strong>in</strong>timate<br />

shar<strong>in</strong>g has never looked so good<br />

— provided that it can be achieved. A<br />

handful of start-ups are appeal<strong>in</strong>g to<br />

users who may be tired of the social<br />

spotlight but still enjoy the whimsy of<br />

apps.<br />

‘‘We’ve spent the last decade struggl<strong>in</strong>g<br />

with this,’’ said Andrea Matwyshyn,<br />

an assistant professor of legal<br />

studies and bus<strong>in</strong>ess ethics at the<br />

Wharton School of the University of<br />

Pennsylvania. ‘‘Companies are try<strong>in</strong>g<br />

to figure out the relationship of privacy<br />

to users while also try<strong>in</strong>g to provide<br />

personalization and customization of<br />

their services.’’<br />

Even the largest social network<strong>in</strong>g<br />

sites sense a ris<strong>in</strong>g tide of awareness<br />

about the need to protect delicate and<br />

personal <strong>in</strong>formation that is shared<br />

about users onl<strong>in</strong>e. Last month, Twitter<br />

announced that it was <strong>in</strong>troduc<strong>in</strong>g a<br />

‘‘do not track’’ feature that lets users<br />

keep Twitter from collect<strong>in</strong>g personal<br />

<strong>in</strong>formation as they move around the<br />

Web. <strong>The</strong> feature is not perfect — it<br />

works only on third-party sites that<br />

agree to acknowledge it.<br />

‘‘People can’t always foresee or understand<br />

what could happen to their<br />

data,’’ Ms. Matwyshyn said. ‘‘But they<br />

know they don’t want it end<strong>in</strong>g up <strong>in</strong><br />

the wrong hands.’’<br />

Companies that do figure out how to<br />

embed privacy <strong>in</strong>to a social service<br />

could ga<strong>in</strong> a bus<strong>in</strong>ess and market<strong>in</strong>g<br />

advantage, position<strong>in</strong>g themselves as<br />

safer spaces to share and exchange <strong>in</strong>formation.<br />

‘‘We should encourage Web and mobile<br />

services to lead with their privacy<br />

practices and let users vote with their<br />

feet,’’ Fred Wilson, a venture capitalist<br />

<strong>in</strong> New York, wrote <strong>in</strong> a recent blog post.<br />

Mr. Wilson is an <strong>in</strong>vestor <strong>in</strong> Duck Duck<br />

Go, a search eng<strong>in</strong>e that says it does not<br />

keep track of a user’s search history.<br />

Gabriel We<strong>in</strong>berg, one of the creators<br />

of Duck Duck Go, says it has been able<br />

to carve out a niche audience despite<br />

thedom<strong>in</strong>ance of juggernauts like<br />

Google and B<strong>in</strong>g. Last month, the site<br />

performed 45 million searches, and Mr.<br />

We<strong>in</strong>berg predicts that next month the<br />

figure will <strong>in</strong>ch toward 50 million.<br />

‘‘It’s easy to th<strong>in</strong>k that no one cares<br />

about privacy because they still use all<br />

the services that keep track of them,’’<br />

Mr. We<strong>in</strong>berg said. Switch<strong>in</strong>g from services<br />

like Google may be hard for<br />

people who are accustomed to them, or<br />

who rely on them for functions like<br />

e-mail as well as search.<br />

‘‘If the switch<strong>in</strong>g costs are too high,<br />

users aren’t will<strong>in</strong>g to make the trade<br />

and that’s not unreasonable,’’ he said.<br />

‘‘But if there’s a viable alternative,<br />

they’re more will<strong>in</strong>g to do it.’’<br />

Many onl<strong>in</strong>e companies that have<br />

tried to build bus<strong>in</strong>esses around their<br />

BITS, PAGE 15<br />

STUART ISETT/BLOOMBERG NEWS<br />

Employees at a Microsoft Store <strong>in</strong> Seattle play<strong>in</strong>g with an Xbox K<strong>in</strong>ect, which has spawned its own commercial ecosystem for uses that go far beyond play<strong>in</strong>g video games.<br />

Leader or follower, or was it both?<br />

K<strong>in</strong>ect evolved quickly<br />

out of the game universe<br />

Microsoft had created<br />

BY ROB WALKER<br />

When the K<strong>in</strong>ect was <strong>in</strong>troduced <strong>in</strong> November<br />

2010 as a $150 motion-control<br />

add-on to Microsoft’s Xbox consoles, it<br />

drew attention from more than just<br />

video game players. A slim, black, oblong<br />

wedge perched on a base, it allowed<br />

W<strong>in</strong>n<strong>in</strong>g over the techies<br />

From <strong>The</strong> New York Times Magaz<strong>in</strong>e<br />

a player to use his body to throw virtual<br />

footballs or kick virtual opponents without<br />

a controller, but it was also seen as<br />

an important step forward <strong>in</strong> controll<strong>in</strong>g<br />

technology with natural gestures.<br />

In fact, as the company likes to note,<br />

the K<strong>in</strong>ect set ‘‘a Gu<strong>in</strong>ness World Record<br />

for the fastest-sell<strong>in</strong>g consumer<br />

device ever.’’ And at least some of the<br />

early adopters of the K<strong>in</strong>ect were not<br />

content just to play games with it. ‘‘K<strong>in</strong>ect<br />

hackers’’ were drawn to its affordably<br />

synthesiz<strong>in</strong>g an arsenal of sophisticated<br />

components — notably, a fancy<br />

video camera, a ‘‘depth sensor’’ to capture<br />

visual data <strong>in</strong> three dimensions and<br />

a multiarray microphone capable of a<br />

similar trick with audio.<br />

Comb<strong>in</strong>ed with a powerful microchip<br />

and software, these capabilities could be<br />

put to uses unrelated to the Xbox. Like:<br />

enabl<strong>in</strong>g a small drone to ‘‘see’’ its surround<strong>in</strong>gs<br />

and avoid obstacles; rigg<strong>in</strong>g<br />

a 3-D scanner to create small re<strong>production</strong>s<br />

of almost any object; direct<strong>in</strong>g the<br />

music of a computerized orchestra with<br />

PALO ALTO, CALIFORNIA<br />

BY DAVID STREITFELD<br />

Men <strong>in</strong>vented the Internet. And not just<br />

any men. Men who idolized Mr. Spock<br />

and cried when Steven P. Jobs died.<br />

Nerds. Geeks. But are these men<br />

trapped <strong>in</strong> the past even as they create<br />

the future?<br />

That’s the debate that has sprung up<br />

here s<strong>in</strong>ce Ellen Pao, a junior partner <strong>in</strong><br />

her early 40s at the dist<strong>in</strong>guished venture<br />

capital firm of Kle<strong>in</strong>er Perk<strong>in</strong>s<br />

Caufield & Byers, filed a sexual discrim<strong>in</strong>ation<br />

lawsuit aga<strong>in</strong>st the company<br />

and her co-workers.<br />

<strong>The</strong> compla<strong>in</strong>t, laced with accusations<br />

of professional retaliation after spurned<br />

sexual advances, has riveted Silicon<br />

Valley, whose venture capitalists generally<br />

prefer media attention for their<br />

bus<strong>in</strong>esses and deals, not themselves.<br />

Instead of talk<strong>in</strong>g about the New New<br />

Th<strong>in</strong>g, people are discuss<strong>in</strong>g an old, old<br />

problem. And they are tak<strong>in</strong>g sides.<br />

Although the accusations have yet to<br />

be heard <strong>in</strong> court, even some of Ms.<br />

Pao’s critics concede that she is expos<strong>in</strong>g<br />

an uncomfortable truth about Silicon<br />

Valley: start<strong>in</strong>g tech companies <strong>in</strong><br />

2012 is still a male game, and so is fi-<br />

conductorlike gestures. It has been used<br />

to make animation, to add visual effects<br />

to videos and to control a PC through the<br />

movement of a person’s hands.<br />

At the International Consumer Electronics<br />

Show this year, Steven A.<br />

Ballmer, Microsoft’s chief executive,<br />

used his keynote presentation to announce<br />

that the company would release<br />

a version specifically meant for use outside<br />

the Xbox context and to <strong>in</strong>dicate<br />

that the company would lay down formal<br />

rules permitt<strong>in</strong>g commercial uses<br />

for the device. A result has been a fresh<br />

wave of K<strong>in</strong>ect-centric experiments.<br />

An object that spawns its own commercial<br />

ecosystem is a th<strong>in</strong>g to take seriously.<br />

Patent-watch<strong>in</strong>g sites report that<br />

<strong>in</strong> recent months, Sony, Apple and<br />

Google have all registered plans for gesture-control<br />

technologies like the K<strong>in</strong>ect.<br />

But there is disagreement about exactly<br />

how the K<strong>in</strong>ect evolved <strong>in</strong>to an<br />

object with such potential. Did Microsoft<br />

<strong>in</strong>tentionally create a versatile platform<br />

analogous to Apple’s App Store? Or did<br />

outsider technology artists and hobbyists<br />

take what the company thought of as<br />

a game device and redef<strong>in</strong>e its value?<br />

This clash of theories illustrates a larger<br />

debate about the nature of <strong>in</strong>novation<br />

<strong>in</strong> the 21st century, and the even larger<br />

question of who decides what any given<br />

object is really for. Does progress flow<br />

from a corporate entity’s offer<strong>in</strong>g a whizbang<br />

breakthrough embraced by the<br />

masses? Or does success now depend on<br />

a company’s acquiesc<strong>in</strong>g to the crowd’s<br />

<strong>in</strong>put? <strong>The</strong> K<strong>in</strong>ect does not neatly conform<br />

to either theory. But <strong>in</strong> this <strong>in</strong>stance,<br />

maybe it is not about whose vision w<strong>in</strong>s;<br />

maybe it is about the contest.<br />

<strong>The</strong>odore Watson bought a K<strong>in</strong>ect as<br />

soon as the gadget was available. He<br />

soon acquired 15 more. He does not use<br />

KLEINER PERKINS CAUFIELD & BYERS<br />

Ellen Pao says she suffered from a ‘‘pattern<br />

of retaliation’’ by a colleague for five years.<br />

cause women are quiet.’’ Another male<br />

executive, Chi-Hua Chien, is quoted <strong>in</strong><br />

the suit say<strong>in</strong>g women were not be<strong>in</strong>g<br />

<strong>in</strong>vited to a big-deal d<strong>in</strong>ner because<br />

they would ‘‘kill the buzz.’’<br />

Neither Ms. Pao nor any of the parties<br />

mentioned <strong>in</strong> the lawsuit would comment<br />

on it.<br />

Kle<strong>in</strong>er is an unlikely defendant for<br />

another reason. It is particularly conscious<br />

of its image. ‘‘As Kle<strong>in</strong>er Perk<strong>in</strong>s<br />

sees it, the Florence of the Renaissance<br />

had the Medicis, the American steel <strong>in</strong>dustry<br />

had the House of Morgan, and<br />

Silicon Valley <strong>in</strong> the late 20th century<br />

has Kle<strong>in</strong>er Perk<strong>in</strong>s,’’ David A. Kaplan<br />

wrote <strong>in</strong> ‘‘<strong>The</strong> Silicon Boys’’ <strong>in</strong> 1999.<br />

That was when the firm was at its<br />

peak, the money beh<strong>in</strong>d Netscape, Genentech,<br />

Amazon and a little start-up<br />

called Google.<br />

‘‘If you believe every allegation <strong>in</strong> the<br />

compla<strong>in</strong>t, it’s appall<strong>in</strong>g and an important<br />

w<strong>in</strong>dow <strong>in</strong>to how the valley works,’’<br />

Mr. Kaplan said. ‘‘But I’m somewhat<br />

skeptical. <strong>The</strong> clichés you hear <strong>in</strong> the<br />

valley are about the pranks, the obsessiveness,<br />

the Foosball tables. You don’t<br />

really hear about rand<strong>in</strong>ess and mistreatment<br />

of women. That doesn’t prove<br />

it’s not there, but that’s not the lore.’’<br />

Of course, it depends on your perspecnanc<strong>in</strong>g<br />

them.<br />

Her compla<strong>in</strong>t goes further. It depicts<br />

venture capitalists here as a group of<br />

21st-century men who may be hard at<br />

work build<strong>in</strong>g the 22nd century but,<br />

when it comes to deal<strong>in</strong>g with women <strong>in</strong><br />

the workplace, are stuck firmly <strong>in</strong> the<br />

caveman era — or at least <strong>in</strong> the 1950s.<br />

‘‘You talk to any woman <strong>in</strong> technology<br />

and she will have a personal story or<br />

know a story where she felt conscious of<br />

her gender <strong>in</strong> subtle or significant<br />

ways,’’ said Kathy Savitt, 48, the chief<br />

executive of the social commerce startup<br />

Lockerz. Sometimes, she said, it’s as<br />

mild as realiz<strong>in</strong>g, ‘‘I’m the only chick <strong>in</strong><br />

the room.’’ Other times, ‘‘it’s a lack of<br />

any of them to play games. Mr. Watson<br />

is an artist and a designer who lives <strong>in</strong><br />

New York, and his work uses closed-circuit<br />

security cameras, graphics cards<br />

and game hardware ‘‘tweaked,’’ he<br />

notes, ‘‘for our purposes.’’<br />

To use a K<strong>in</strong>ect with a computer <strong>in</strong>stead<br />

of an Xbox, Mr. Watson needed a<br />

‘‘driver’’ (basically a bit of software)<br />

that did not exist. He jo<strong>in</strong>ed a small, farflung<br />

and technically sophisticated<br />

community effort dubbed OpenK<strong>in</strong>ect,<br />

which sprang up immediately after the<br />

K<strong>in</strong>ect was <strong>in</strong>troduced, to write the code<br />

that would make this possible. At the<br />

same time, Adafruit, a hobbyist-focused<br />

electronics company based <strong>in</strong> New<br />

Innovators outside Microsoft<br />

have learned to love one of its<br />

products. Or if not love, then<br />

at least take it seriously.<br />

York, offered $1,000 to the first person or<br />

group to write the necessary code <strong>in</strong> an<br />

open-source format.<br />

At the time, <strong>in</strong> late 2010, Microsoft’s<br />

primary K<strong>in</strong>ect focus was the ma<strong>in</strong>stream<br />

game market. Its first response<br />

to OpenK<strong>in</strong>ect seemed predictable:<br />

CNET reported an unidentified representative<br />

declar<strong>in</strong>g that the company<br />

did ‘‘not condone the modification of its<br />

products’’ and would work closely with<br />

the law enforcement authorities ‘‘to<br />

keep K<strong>in</strong>ect tamper-resistant.’’ Adafruit<br />

<strong>in</strong>creased its prize, ultimately to $3,000.<br />

With<strong>in</strong> days a developer <strong>in</strong> Spa<strong>in</strong> posted<br />

videos demonstrat<strong>in</strong>g that he had made<br />

his K<strong>in</strong>ect work with a PC.<br />

OpenK<strong>in</strong>ect ref<strong>in</strong>ed and spread the<br />

open source driver code, and a variety<br />

of ‘‘K<strong>in</strong>ect hacks,’’ as they came to be<br />

called, proliferated <strong>in</strong> YouTube videos.<br />

Soon Mr. Watson and his wife, Emily<br />

Gobeille, posted their own video, <strong>in</strong><br />

which her hand movements were captured<br />

by a K<strong>in</strong>ect and translated onto a<br />

screen display<strong>in</strong>g a computer-generated<br />

bird figure, which she controlled<br />

like a high-technology puppet.<br />

Mr. Watson told me this by telephone<br />

from Amsterdam, where he and Ms.<br />

Gobeille had just presented a polished<br />

version of their creation as an <strong>in</strong>stallation<br />

at C<strong>in</strong>eKid, an <strong>in</strong>ternational conference<br />

for professionals work<strong>in</strong>g <strong>in</strong> children’s<br />

media. <strong>The</strong> specter of a Microsoft-backed<br />

‘‘law enforcement’’ response to projects<br />

like his had obviously faded. In fact,<br />

shortly after the open-source driver was<br />

f<strong>in</strong>ished, one of Microsoft’s top K<strong>in</strong>ect<br />

people appeared on U.S. public radio and<br />

asserted that OpenK<strong>in</strong>ect participants<br />

would ‘‘absolutely not’’ be prosecuted.<br />

In December 2010, Microsoft’s partner,<br />

PrimeSense, an Israeli company<br />

that created the K<strong>in</strong>ect’s 3-D depthsens<strong>in</strong>g<br />

chip, released its own set of<br />

software drivers and code for the socalled<br />

hackers to work with. A few<br />

months later, Microsoft announced it<br />

would release its own code kit. It certa<strong>in</strong>ly<br />

seemed, as Mashable.com put it,<br />

that the company had ‘‘done a complete<br />

180 when it comes to hacks.’’<br />

<strong>The</strong> idea of a loosely knit band of outsider<br />

creative coders forc<strong>in</strong>g a huge<br />

company to reth<strong>in</strong>k a major new product<br />

is appeal<strong>in</strong>g. Especially when that company<br />

is Microsoft. Fairly or not, Microsoft<br />

is widely viewed not as an <strong>in</strong>novator<br />

but as a peddler of me-too products<br />

with ruthless bus<strong>in</strong>ess acumen. Open<br />

source zealots po<strong>in</strong>t all the way back to<br />

1976, when Bill Gates wrote an ‘‘open letter<br />

to hobbyists,’’ compla<strong>in</strong><strong>in</strong>g that dis-<br />

KINECT, PAGE 16<br />

LONDON<br />

Sun tabloid unable to fill<br />

the void left by clos<strong>in</strong>g<br />

of News of the World<br />

BY AMY CHOZICK<br />

Rupert Murdoch has endured a barrage<br />

of blows <strong>in</strong> the phone-hack<strong>in</strong>g scandal<br />

at his British tabloids. One setback,<br />

however, is not happen<strong>in</strong>g <strong>in</strong> Parliament,<br />

but on British newsstands.<br />

<strong>The</strong> Sun, a brash daily tabloid that delivers<br />

mostly splashy sports stories,<br />

topless models and scandalous<br />

celebrity gossip to work<strong>in</strong>g-class readers<br />

— all wrapped <strong>in</strong> a colorful, cheeky<br />

tone — has long been a pet of Mr. Murdoch’s.<br />

Lately, however, sales of the new<br />

Sunday edition, the one created to replace<br />

the shuttered News of the World,<br />

have slipped.<br />

Sales of the Sunday edition have<br />

fallen 28 percent, to 2.3 million <strong>in</strong> April<br />

from 3.2 million copies sold <strong>in</strong> the weeks<br />

after it first hit the stands <strong>in</strong> February,<br />

accord<strong>in</strong>g to the Audit Bureau of Circulations.<br />

<strong>The</strong> News of the World sold 2.7<br />

million copies (or one copy for every 23<br />

people <strong>in</strong> Brita<strong>in</strong>), <strong>in</strong> July, when Mr.<br />

Murdoch closed the tabloid.<br />

Analysts estimated that circulation at<br />

<strong>The</strong> Sun on Sunday would cont<strong>in</strong>ue to<br />

fall until stabiliz<strong>in</strong>g at about two million<br />

copies, below Mr. Murdoch’s hope but<br />

bigger than its closest competitor <strong>The</strong><br />

Sunday Mirror, which sold 1.1 million<br />

copies <strong>in</strong> April.<br />

Why has the Sun been unable to fill the<br />

void left by the 168-year-old News of the<br />

World? British media analysts suggest<br />

that <strong>The</strong> News, which was known for its<br />

<strong>in</strong>vestigative exclusives, transcended<br />

social class <strong>in</strong> a way <strong>The</strong> Sun has not<br />

been able to do. Readers who do not buy<br />

<strong>The</strong> Sun dur<strong>in</strong>g the week do not see it as<br />

the newspaper for them Sundays either,<br />

said Douglas McCabe, media analyst at<br />

Enders Analysis <strong>in</strong> London.<br />

‘‘<strong>The</strong> Sun brand is very much aimed<br />

at the work<strong>in</strong>g man,’’ Mr. McCabe said.<br />

ULI SEIT FOR THE NYT<br />

‘‘Hav<strong>in</strong>g a w<strong>in</strong>n<strong>in</strong>g paper is the best answer<br />

to our critics,’’ Mr. Murdoch has said.<br />

‘‘<strong>The</strong> News of the World was a one-off<br />

weekly picked up by those people but<br />

also by the educated middle class who<br />

buy <strong>The</strong> Sunday Times.’’<br />

Charlie Beckett, director of Polis, a<br />

media research organization affiliated<br />

with the London School of Economics,<br />

said, ‘‘It’s difficult to underestimate how<br />

unique <strong>The</strong> News of the World was.’’<br />

‘‘<strong>The</strong> front page would always have a<br />

sensational story that usually <strong>in</strong>volved<br />

sex, politics and crime and might have<br />

even been true,’’ he said, add<strong>in</strong>g: ‘‘<strong>The</strong><br />

Sun hasn’t been able to repeat that.’’<br />

In a recent weekday edition, <strong>The</strong> Sun<br />

led with an ‘‘exclusive’’ about an obese<br />

teenager (‘‘said to be 63 STONE,’’ or 882<br />

pounds) who had to be evacuated from<br />

her home <strong>in</strong> south Wales.<br />

In February, Mr. Murdoch traveled to<br />

London to <strong>in</strong>troduce <strong>The</strong> Sun on Sunday<br />

personally, six months after News Corp.<br />

SUN,PAGE16<br />

Suit raises questions about women’s place <strong>in</strong> Silicon Valley<br />

relevance, a feel<strong>in</strong>g you can see an end<br />

to your opportunities.’’<br />

With the number of women <strong>in</strong> Silicon<br />

Valley so meager, a prom<strong>in</strong>ent discrim<strong>in</strong>ation<br />

lawsuit does not surprise Ms.<br />

Savitt. This place runs <strong>in</strong>to trouble with<br />

women on a regular basis, most memorably<br />

<strong>in</strong> recent years when the C.E.O. of<br />

Hewlett-Packard resigned after <strong>in</strong>appropriate<br />

conduct with a former reality<br />

TV actress who was work<strong>in</strong>g for him.<br />

Still, Ms. Pao’s lawsuit has <strong>in</strong>jected<br />

talk of sexual politics <strong>in</strong>to a conversation<br />

that generally sticks to money and eyeballs<br />

and bus<strong>in</strong>ess plans, monetization<br />

and enlightenment of the masses. Men <strong>in</strong><br />

Silicon Valley may not behave any worse<br />

than men anywhere else, but people here<br />

like to th<strong>in</strong>k it’s all a meritocracy.<br />

<strong>The</strong> shock really stems from where<br />

the scandal is tak<strong>in</strong>g place. Ms. Savitt<br />

knows Kle<strong>in</strong>er well; the firm is f<strong>in</strong>anc<strong>in</strong>g<br />

Lockerz. She cannot comment on<br />

the suit but expresses her deep admiration<br />

for the Kle<strong>in</strong>er crew. <strong>The</strong> firm is one<br />

of the few exceptions to the venture<br />

world’s lack of <strong>in</strong>terest <strong>in</strong> hir<strong>in</strong>g women.<br />

A quarter of its 50 partners are female.<br />

That fact fits awkwardly with the lawsuit’s<br />

claim that one male executive,<br />

Randy Komisar, told Ms. Pao that women<br />

would never succeed at Kle<strong>in</strong>er ‘‘betive.<br />

Sandy Kurtzig was one of two female<br />

eng<strong>in</strong>eer<strong>in</strong>g students <strong>in</strong> her class at<br />

Stanford University <strong>in</strong> the late 1960s and<br />

is still <strong>in</strong> the game, with a start-up funded<br />

by Kle<strong>in</strong>er. She always tried to take the<br />

valley’s sexism <strong>in</strong> stride — ‘‘When men<br />

made passes, I just downplayed it so the<br />

guy doesn’t feel he’s be<strong>in</strong>g put down<br />

when rejected’’ — but is disappo<strong>in</strong>ted by<br />

its persistence.<br />

‘‘I am shocked there aren’t more<br />

women <strong>in</strong> high positions <strong>in</strong> Silicon Valley,’’<br />

Ms. Kurtzig said. ‘‘I always thought<br />

the world was go<strong>in</strong>g to be gender-bl<strong>in</strong>d.’’<br />

While Kle<strong>in</strong>er has seen its magic touch<br />

somewhat dimmed of late — it came<br />

very late to the money founta<strong>in</strong> that was<br />

Facebook — a lawsuit like this could permanently<br />

kill the buzz. Already, the suit<br />

has eclipsed the mid-May announcement<br />

of the firm’s 15th fund, a $525 million<br />

<strong>in</strong>vestment pot. Which, despite all<br />

those women at Kle<strong>in</strong>er, is be<strong>in</strong>g run by<br />

one woman and n<strong>in</strong>e men.<br />

Ms. Pao, who came to Kle<strong>in</strong>er with the<br />

dream of help<strong>in</strong>g direct such a fund,<br />

graduated from Pr<strong>in</strong>ceton with a degree<br />

<strong>in</strong> electrical eng<strong>in</strong>eer<strong>in</strong>g. She got a law<br />

degree from Harvard and worked for<br />

Cravath Swa<strong>in</strong>e & Moore for two years<br />

do<strong>in</strong>g <strong>in</strong>ternational deals. She returned<br />

WOMEN, PAGE 16

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