SiliconBeat

One of the most significant trends I’ve been watching over the past decade is the dramatic drop in public companies in Silicon Valley. Naturally, that number was artificially inflated during the dot-com bubble when it reached 417 in 2000. For our purposes, Silicon Valley includes San Mateo and Santa Clara counties, and the southern half of Alameda County.

But the number of public companies has dropped for nine straight years now. Even when IPOs briefly reappeared in 2006 and 2007, they weren’t enough to overcome the net loss of public companies through acquisitions or bankruptcy.

In 2008, the number had fallen to 261. We just updated our records and the latest figure is 241.

That’s not just less than the dot-com era, that’s well below the 315 public companies the valley had in 1994 when the Mercury News started keeping track.

Here’s why I think this is a big deal.

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Google Buzz is here. And the big question is this: Can Google finally get in the social game? After playing around with Google Buzz for a bit today, I’ll say the jury is out for me. But I have a few thoughts, and will have more after I’ve played with it for a few weeks.

The first impulse I have is to fight is the despair over creating and learning a new social networking tool. Facebook and Twitter work well for me, despite some imperfections. I won’t say there isn’t room for improvement. But any new service has to clear a pretty high barrier to become part of my daily routine.

After digging in and following a few friends on Google Buzz, the next thing that strikes me as interesting about Google Buzz is how much it mirrors the approach to social that Yahoo is taking. And there’s something I wouldn’t expect to be writing: How Google is following Yahoo. Read the rest of this entry »

We learned in late December that Yelp turned down an acquisition offer from Google reported to be worth $500 million. Yelp then raised $25 million from Elevation Partners, with another $75 million possibly coming down the road.

It may need that money to ward off Google, which is ramping up its local advertising offerings. The new service places Yelp directly in Google’s scope. And I wonder if it won’t lead Yelp to regret not selling when they had the chance.

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Over the weekend, my column looked at the remarkable growth in Google’s lobbying operation in Washington, D.C. In just four years, Google has become the valley’s second largest company when it comes to lobbying expenditures.

Naturally, I left out a some details. While the story focused on money, there are other ways Google has been trying to extend its influence. And their adoption of these strategies shows how quickly the company has become savvy in the ways of Washington.

Let’s run through a few of these.

Google’s lobbying team includes the usual requisite of former government officials from agencies that have been having an impact on the company’s business. The lobbying team includes former employees from the Justice Department, Treasury, the FCC, and Congressional staffs, according to the Center for Responsive Politics.

One of the interesting things you can see from that data at CPR’s OpenSecrets.org is the growing range of issues that Google is lobbying on. In 2009, the top issues included advertising, energy, trade, telecom and anti-trust. Of those, only trade was listed among Google’s issues in 2005. And the list of agencies and branches of government that Google lobbies has grown extensively.

Of course, it’s no surprise that anti-trust is near the top of the list of issues. Just in the last couple of years, Google faced this anti-trust inquiries with its acquisition of DoubleClick, saw its search deal with Yahoo scuttled, and now faces a review of its plans to buy AdMob.

Google has also been savvy about hiring former government officials in non-lobbying positions. For instance, in 2008 and 2009, the U.S. Securities and Exchange Commission was concerned about some of the ways Google was accounting for various costs related to traffic acquisition, and also had questions about whether the company was being transparent enough on some issues such as whether or not it was disclosing enough information about letting a large group of contractors go. These questions were all resolved without the SEC taking any formal actions. The Google official reponding to those questions? It was Mark Fuchs, Google’s vice president of finance and chief accountant, who used to work at the SEC.

Going in the other direction, several Google employees have gone to work in the Obama administration:

• Andrew McLauglin, former Google policy chief, serves as Obama’s deputy chief technology officer.
• Katie Stanton, former principal of Google’s New Business Development team, is now Obama’s director of citizen participation.
• Sonal Shah, a Google lobbyist and head of global development issues at Google.org, served as an adivsor on the Obama transition team. She previously worked in the Treasury Department.
• Sumit Agarwal, Google’s head of mobile product management, will become deputy assistant secretary of defense for outreach and social media in the Office of the Assistant Secretary of Defense ,it was announced last week.
• CEO Eric Schmidt is a member of President Obama’s Council of Advisors on Science and Technology.

In addition, Schmidt has become chair of the New America Foundation, a non-partisan Wahshington think tank. That’s a lot of involvement in D.C. for a guy who told the Washington Post last fall he doesn’t care much for the scene:

As for Google’s relationship with Washington’s power structure, Schmidt said the tech industry is still not as strong as others in its lobbying representation on Capitol Hill, but that that’s fine with him. Google, and the tech industry, does better for itself when it focuses on ideas and innovation — and not politics, he said.

“The part of politics in Washington that’s ‘who you know’ and all that kind of stuff, it’s just not very interesting,” he said.

The company has also established a summer policy fellowship where it funds about a dozen or more undergraduate and graduate students to work with various policy organizations. Those include some that have found themselves on the opposite side of issues from Google. For instance, last summer, Google paid for one Wisconsin student to work at the American Library Association, an organization that has been opposing the company’s plans to scan books.

As I noted in the column, none of this is illegal, or unusual. What bears watching is how Google uses this growing influence. There are a lot of issues where I agree with them, and am glad to have them fighting. But there are others where I disagree (i.e., book search)

But when it comes to Washington msucle, you certainly can’t call them the underdog anymore.

Motorola Cliq

When Motorola announced the Cliq smartphone in September, I was pretty intrigued.

I wrote a column about how I thought the Cliq’s interface could represent “the next stage in the evolution of the smart-phone.” I think now that I might have overstated the case.

The Cliq was the first Motorola phone to run Google’s Android operating system. What I found interesting about it was that Motorola had built a custom interface on top of Android that it calls Motoblur. Read the rest of this entry »

Looks like it’s full steam ahead for Google. Revenues rose 17 percent to $6.7 billion. Non-GAAP earnings jumped 35 percent to $2.2 billion.

Once again, Netflix has been placed on a death watch. But I’m not buying it for a second. We’ve heard that too many times over the company’s history. And each time, the company has nimbly defeated new and established competitors, while growing like gangbusters in a horrid economy.

I wrote last year that I was done betting against Netflix. And I’ll stand by that now. Read the rest of this entry »

For those of you thinking the IPO market is going to come roaring back this year, think again.

I just saw the post from Techcrunch yesterday that Yelp was on the verge of taking a $50 million investment from Elevation Partners. This comes after the failed acquisition talks with Google. Here’s what’s interesting:

“The size of the round is in the $50 million range, but includes both a primary investment component as well as a secondary offering for long time employees. These deals are now being referred to as ‘DST deals,’ since DST first invested in Facebook in May 2009 at a $10 billion valuation and later funded employee buyouts at a $6.5 billion valuation. They did a similar deal with Zynga.”

In other words, part of the investment will allow long-time employees to cash out options. Same deal with Facebook and Zynga. But why? Read the rest of this entry »

In my column yesterday about the Google and China mess, I explored how this rift could affect Silicon Valley’s relationship with China. But within the column, I also included this thought:

“The conventional wisdom that has been shattered was based on a kind of digital utopianism prevalent throughout Silicon Valley. This line of thinking holds that the Internet, and Web-based services like Google, Twitter and Facebook, are liberating forces. Maybe it would take five years, maybe a couple of decades, but over time as more Chinese gained access and technology, there would be the inevitable dismantling of cultural, economic and political barriers.”

That spurred some discussions on Twitter and got me thinking more about that idea. By coincidence, I was catching up this morning on my backlog of TED videos, when a talk by Evgeny Morozov came up called: “How the ‘Net aids dictatorships.” The talk is summarized as:

“TED Fellow and journalist Evgeny Morozov punctures what he calls “iPod liberalism” — the assumption that tech innovation always promotes freedom, democracy — with chilling examples of ways the Internet helps oppressive regimes stifle dissent.”

Morozov’s talk got me thinking more about this subject.

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If you have a Google Wave account, click to see the full post where you can see an embedded copy of our Google Wave chat:
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