[FoRK] [dave@farber.net: [IP] Silicon Valley humming again]

Eugen Leitl eugen
Sun Oct 30 09:38:29 PST 2005


----- Forwarded message from David Farber <dave at farber.net> -----

From: David Farber <dave at farber.net>
Date: Sun, 30 Oct 2005 12:33:38 -0500
To: Ip Ip <ip at v2.listbox.com>
Subject: [IP] Silicon Valley humming again
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Begin forwarded message:

From: Dewayne Hendricks <dewayne at warpspeed.com>
Date: October 30, 2005 11:49:52 AM EST
To: Dewayne-Net Technology List <dewayne-net at warpspeed.com>
Subject: [Dewayne-Net] Silicon Valley humming again
Reply-To: dewayne at warpspeed.com


Silicon Valley humming again
Tech giants turn on their smarts and figure out where to take the  
Internet
- Carolyn Said, Chronicle Staff Writer
Sunday, October 30, 2005
Job advertisements flood the Internet, seeking workers for Google,  
Yahoo and eBay. Newspaper headlines blare reports of those companies  
raking in money hand over fist and bingeing on multimillion-dollar  
shopping sprees. And Apple Computer, the personal computing pioneer,  
makes its umpteenth comeback.

After a few bleak years of retrenching and downsizing, suddenly  
there's a feeling of ebullience in Silicon Valley. The buzz is  
humming. The money is flowing. The deals are happening.

So -- has Silicon Valley gotten its groove back?

"Silicon Valley has got its mojo back but, like always, it gets it  
back in a different way than last time," said Martin Kenney, author  
of the book "Understanding Silicon Valley" and a professor of  
regional development at UC Davis. "What happens is that the  
technology becomes staid and stabilized and then, boom, it explodes  
out in a new direction."

The valley's strength is its phoenixlike ability to constantly rise  
again. While the basic ingredients for business success -- brains  
plus money -- stay the same, the region's focus has shifted over the  
years, from electronics to microprocessors to hardware to software to  
dot-coms to the current incarnation, which could be dubbed the  
"Internet-Powered World." A quartet of successful local companies  
epitomizes this new wave. Google, Yahoo, eBay and Apple have all  
figured out how to make money by providing content and services over  
the Internet to a global audience. On the face of it, that sounds  
like the classic description of dot-coms, but all these firms have  
found more creative ways to exploit the Internet than simply setting  
up storefronts in cyberspace.

"They're leveraging the next wave, which is the Internet," said  
Michael Moe, a founding partner of ThinkEquity Partners, a San  
Francisco investment bank specializing in emerging technology firms.  
"Is it tech? Software? I don't know. It's innovation."

The Net biggies' financial results of late, especially Google's, have  
carried a strong whiff of exuberance. In third-quarter results  
announced this month, Google's profit was up sevenfold; Yahoo, eBay  
and Apple saw revenue grow by more than a third each, and Apple  
scored a record annual profit of over a billion dollars.

Apple itself encapsulates some of the changes the valley has gone  
through. It went from a company that sold hardware boxes to one whose  
business is predicated on a new way to merchandise content over the  
Internet. The hugely popular iPod is hardware, of course, but it's  
the iTunes online music store -- now including videos -- that helped  
fuel sales of 28 million iPods to date and blazed a new trail for  
legal sales of downloadable music.

In another sign of vigor, the new Net companies are wheeling and  
dealing up a storm as they expand their offerings.

Google has zoomed from plans to digitize the world's top libraries to  
inking a deal with NASA Ames for a million square feet of office  
space and joint research on topics like supercomputing. It joined its  
former rival Sun last month in a modest deal that observers said  
could presage a much bigger step: taking on the behemoth Microsoft.  
Now it's floating an experimental e-commerce project that could  
challenge eBay.

EBay ponied up $2.6 billion in September for voice-over-Internet  
company Skype, which lets people make free phone calls over their  
PCs. "Communications is at the heart of e-commerce and community,"  
eBay CEO Meg Whitman said in explaining the purchase.

And in a behind-the-scenes drama still being played out, Google,  
Yahoo and Microsoft are tussling over a stake in America Online, all  
hoping to attract AOL's huge audience to their emerging Internet  
content and services.

One common theme for the big Net players, and just about everyone  
else in Silicon Valley: In today's iteration, the tech industry is  
more global than ever.

"The valley is becoming a node for an international network, probably  
the leading node on the network," said Ross DeVol, director of  
regional economics at the Milken Institute, an economic think tank in  
Santa Monica.

Even the newest startups factor India and China into their business  
plans from the get-go as a source of both revenue and talent. Of  
course, that overseas talent is one reason the local job market  
remains soft.

"The go-go days of people hiring tons of employees have just not  
returned," said Paul Saffo, director of Palo Alto's Institute for the  
Future.

He's cautious about saying the valley has had a total renaissance.

[snip]

Chronicle Deputy Business Editor Alan T. Saracevic contributed to  
this report. E-mail Carolyn Said at csaid at sfchronicle.com.

Page J - 1
URL: <http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/10/30/ 
BUGH5FFD6J1.DTL>

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