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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If you missed it, over the weekend we ran my look at Hewlett-Packard’s massive job cuts over the past decade: 75,505.

I have a few other stray thoughts that didn’t make it into the main story. And a few questions I want to follow up on in the coming weeks.

First, the stray thoughts.

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What is it with those demonic sheep?

IBM rolled out a new line of Unix server systems under the Power 7 nameplate on Monday. Analysts said IBM appears to be positioning the new machines as a counter to Oracle CEO Larry Ellison’s ambitious plans for selling high-end Sparc servers from newly acquired Sun Microsystems.

Both companies are angling to sell powerful (and expensive) systems that combine hardware and software, engineered and optimized for specific uses such as running complex financial operations. IBM’s press release lays out all their technical specs in detail.

But IBM didn’t stop there. Ellison has been trash-talking IBM for months now, and Big Blue answered back today with a feisty Facebook page (www.facebook.com/ServersForTruth) and a YouTube video that digs at Oracle on several points, including an episode last fall when an industry standards group fined Oracle $10,000 for using the group’s name in ads that didn’t meet its rules.

The video, which IBM says it produced in-house, is a fun spoof of a typically over-heated political campaign spot. Borrowing from former Hewlett-Packard CEO Carly Fiorina and her much-discussed ad attacking rival Senate candidate Tom Campbell,  IBM even threw in a cameo appearance by a sheep with glowing red eyes.

Last year, our most popular post by far was “HP’s Mark Hurd made $42.5 million in fiscal 2008.” The post has drawn a whopping 254 comments, with more still coming in.

So given the interest, it seems only right to post an update with Hurd’s last salary numbers for fiscal year 2009: $24.2 million. A story in the Mercury News this week covered the basics: Read the rest of this entry »

Back on Sept. 17, Palm released its long-awaited earnings. They were eagerly anticipated because these would be the first full quarter that included the performance of the Palm Pre. Ever since, analysts and investors have been trying to figure out whether the numbers were good news, bad news, or something else entirely.

This head scratching was reflected in the news coverage of the earnings. The Mercury News had a first-day headline that said “Pre Sales Give Palm A Boost.” But within a couple of days, the consensus seemed to turn against Palm, with analysts and others questioning just how good the numbers were, and worrying about the company’s outlook. Four days later, the Motley Fool wrote: “Palm Discovers Its Limits.”

The confusion was largely due to a change in accounting methods. More on that in a second. But once we take a closer look at the numbers, it seems clear to me that Palm seems to be setting itself up to be sold. And that would likely need to happen sometime in the next six to 12 months.

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Last week this blog offered a bulletin on the runway debut of Hewlett-Packard’s latest “digital clutch,” a chic netbook marketed toward women, featuring a butterfly motif from designer Vivienne Tam. This week we have a little update on footwear.

Miguel Helft at the NYTimes was first to report this one, but we also noticed the unusual shoes that Google co-founder Sergey Brin was wearing when he popped over to NASA’s Ames Research Center, next door to Google’s Mountain View campus, for a discussion on cloud computing yesterday.

Brin, who’s been seen wearing Crocs at other company events, was sporting high-tech Vibram FiveFinger moccasins — thin-soled sports shoes with a design that fits around each toe, the way a glove fits around each finger. (Vibram’s Website promises “the same physical and visceral sensation” as going barefoot.)

Brin was wearing standard Silicon Valley khakis and a short-sleeved shirt. But the more traditionally dressed government officials who flew out from Washington to attend the event — at which Google announced plans for a dedicated “government cloud” to host software applications for public agencies — would undoubtedly have been reassured to see that Google product manager Matthew Glotzbach wore a dark business suit.

We figure most people aren’t reading this blog for scoops on haute couture (did we spell that correctly?), but what the heck: Contacts at Hewlett-Packard tell us that designer Vivienne Tam will introduce her latest tech offering, the “HP Vivienne Tam digital clutch,” this Saturday as part of Fashion Week in New York.

Some of you may recall that HP created a buzz last year when it introduced a mini-notebook computer with a striking red floral design on the exterior, created by Tam. Looking somewhat like a stylish purse, it was marketed toward fashion-conscious women who didn’t mind paying a relatively high price ($699 for a netbook) to be able to surf the Web without lugging around a big, ungainly laptop.

This year’s offering, we are told, will have a cover design that reflects Tam’s upcoming spring collection, “inspired by the classic Chinese love story, “Butterfly Lovers,” a beautiful tale of freedom, romance and inspiration.”

And if that’s not enough, the HP announcement adds: “It fuses high fashion, small form factor and innovative function to take the personal computer from a necessity to a lifestyle statement for modern women on the go.”

No word yet on whether Tam will be introducing her own design for an x86 server next fall …

Here’s more evidence that netbooks are still a growth product: A new report from DisplaySearch, a unit of the NPD Group research firm, says netbook shipments grew at twice the rate of regular laptops (40 percent compared with 22 percent) from the first quarter of this year to the second.

As a result, the report says, netbooks now account for one out of every five laptops shipped in the last quarter. Netbooks went from about 6 percent of total laptop shipments in the second quarter of 2008, to 22 percent in the second quarter of 2009.

In addition, the report says, “Asus, the pioneer in mini-note PCs, has been steadily losing share because Tier 1 brands like Acer, HP, Dell, Lenovo and Toshiba have become increasingly aggressive in this shipment.”

While the continued popularity of these low-cost, down-sized “mini” notebooks is good news, in one sense, some are concerned that they are contributing to a broader decline in prices and profit margins for companies that make and sell computers, chips and software.

HP, for example, reported that its notebook revenue was down 10 percent for its most recent quarter, even though it sold 19 percent more units than last year.

Watch for a story in the Merc about a new line of laptops and processors that some believe are intended to shore up sales of traditional notebooks.

You don’t usually think of Hewlett-Packard as a food business. But with food contamination growing as a public concern, HP this week announced a new cloud-based recall service that it’s hoping the food industry will adopt as it searches for ways to address the issue.

HP said Canada’s GS1, a non-profit trade group that works to improve supply chain efficiency, will use HP software, services and infrastructure to operate a system that tracks food products as they are manufactured and distributed to retailers.

The system is intended to let different companies use consistent technical standards to share information — which safety advocates say is often lacking during contamination scares — and to distribute specific recall instructions as needed.

IBM rolled out its own cloud-based approach to food “traceability” earlier this year, built around software developed at its South San Jose research lab. HP reportedly competed with IBM for the Canadian contract.

HP’s announcement didn’t draw as many headlines as some of the other food-safety news that broke this month, including reports that authorities had linked another salmonella outbreak to beef from a Fresno packing plant, and that Congress was debating a bill to give the U.S. Food & Drug Administration more inspection and enforcement power. But HP and IBM both see a big market for technology aimed at this issue.

Intel offered up some good news yesterday with its second-quarter earnings yesterday, reporting signs of an uptick in consumer demand for PCs. But executives tempered their optimism by saying they’re not counting on so-called “enterprise” or business customers to increase their buying significantly in 2009.

CEO Paul Otellini said he sees an eventual upside from the fact that many companies have not replaced their employees’ desktop or laptop PCs for three or four years.

 “At some point, those need to be refreshed,” he said, adding that businesses may decide to buy new computers after Microsoft releases its new Windows 7 operating system. But he said he doesn’t expect to see those sales pick up before 2010.

On another somewhat upbeat note, Otellini touted the development of new ultra-low voltage processors for the consumer market, which he said are designed to help PC makers create a new segment of ultra-thin but full-function notebooks. These are aimed at consumers who want portability but also want to do more than access Web-based services on a netbook.