A surprising article in the Times yesterday: Silicon Valley, despite the overall surge in the economy, has not had as much in the way of a revivial as might be expected. While, the macro situation has certainly improved, we are still no where near the pre-Bear market levels on most measures: Office vacancies, VC investments, job creations. I guess technology is just as cyclical and economically sensitive as most other sectors.
“Silicon Valley is back” is on the lips of eager entrepreneurs and venture capitalists, who are rejoicing over the success of Google and pointing to the modest comeback in computer sales. The three-year-long depression, they say, is over.
But other signs tell a different story. The famed traffic jams of Silicon Valley’s boom times are still uncommon. A last-minute reservation at some of the area’s hot restaurants, like Tamarine or Spago Palo Alto, can still be had. And a suite in a gleaming office park that would have cost nearly $10 a square foot in monthly rent in 1999 can now be had for less than $3.
Big portions of sprawling projects built on optimism in the mid-1990’s, like the Midpoint Technology Park in Redwood City, sit dark and unoccupied. On Mission College Boulevard in Santa Clara, 750,000 square feet of office space is still available in an archipelago of office parks built during the boom.
The optimists tend to compare today’s prospects with that of the mid-1990’s, when Netscape Communications’ initial public offering in August 1995 touched off the greatest boom the area has ever witnessed. They believe that a new era, which some are calling Web 2.0, is here.”
click for larger chart
Source: NYT (Note darker bars reflect 2004 data)
Silicon Valley (Version 2.0) Has Hopes Up
By GARY RIVLIN
NY Times: June 22, 2004