What will happen to Silicon Valley's boom?

What will happen to Silicon Valley's boom?

Summary: Silicon Valley has only just recovered from the 2008 crash... what will happen now?

TOPICS: Banking

Turmoil in global financial markets and economies is never good for Silicon Valley despite the fact that the regional economy has its own boom and boost cycles that operate on a different timetable.

Currently, Silicon Valley has been booming, recapturing p the trend that was in place in the second half of 2008 before the financial meltdown, of growing VC investments and jobs. But like that recovery in 2008 which ran smack into an economic crisis, will this recovery again be nipped in the bud?

Maybe. Profits by the large Silicon Valley companies such as Google, Intel, etc are good and projected to be good for the rest of the year.

When it comes to startups, VC investments are at healthy levels and Angels are taking care of the very early, still pivoting, startups.

To a large degree, the current market correction is expected following the large decline in late 2008. All large market corrections are followed by a second correction, and the second one usually signals a longer, but slower period of recovery.

For example, following the crash of 1929, the Dow made a reasonable recovery before it crashed again in 1932, to just 11% of its value in 1929 . The Dow returned to its pre-1929 levels in November 1954. That's a long time to wait for your stock portfolio to get back to where it was before the crash.

So will this current financial crisis hurt SIlicon Valley's recovery? Yes but it's not clear to what extent.

Because of the momentum of capital and the scale of current investments, VCs are committed to a greater extent than before, and therefore they can't easily pull back, or out of many investments, because they are expansion investments.

Problems: VC firms currently raising funds are worth watching. Also, Angels, will they be able to continue investing or have they been harmed by the stock market sell-off? It's different for each individual.

Either way, expect a chilling effect on SIlicon Valley until the picture becomes clearer. And prepare for an M&A boom as cash rich Silicon Valley companies make bargain acquisitions.

Topic: Banking

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Silicon Valley is in for a rough ride

    And there are several reasons. The stock market crash is just one of them. Another big one is that Silicon Valley has become a hollow shell for many companies. You've got ones like HP that are "American" in name only; they employ most of their people overseas, make all their products overseas, and get most of their revenues overseas. Now these companies are moving R&D overseas as well, so all that is left is an accounting office and a bunch of signs on buildings.<br><br>The middle tier companies and startups took up the slack for awhile, but many are in no shape to weather the coming economic storm. As in most of the other tech recessions, Asia and BRIC will recover first, and more companies will move out of the Valley to take part.<br><br>The next several years are going to be excruciating for all of America, Silicon Valley has no immunity or buffer from it. The economists will look back on this period and learn that they were watching the wrong economic indicators all along, since corporate profits and stock prices never did "trickle down" into new jobs and increased earnings for the people as a whole.
    terry flores
    • RE: What will happen to Silicon Valley's boom?

      @terry flores
  • RE: What will happen to Silicon Valley's boom?

    There are certainly a lot of details like that to take into consideration. That is a great point to bring up. I offer the thoughts above as general inspiration but clearly there are questions like the one you bring up where the most important thing will be working in honest good faith. I don?t know if best practices have emerged around things like that, but I am sure that your job is clearly identified as a fair game. Both boys and girls feel the impact of just a moment?s pleasure, for the rest of their lives.<p><a href="http://www.dvdripperformac.us">DVD Ripper for Mac</a></p>
    <p><a href="http://www.ipodtoitunestransfer.info">iPod to iTunes Transfer</a></p>
    <p><a href="http://www.videoconverterformac.us">Video Converter for Mac</a></p>
  • RE: What will happen to Silicon Valley's boom?

    Wow! I wasn't expecting a 5-star review. I would of picked this up regardless of the review because I loved the original, but it is a nice surpris

    metin2 MMO games
    <a href="http://www.metin2oyunu.org/metin2-pvp-serverler" title="metin2 pvp serverler" target="_blank">metin2 pvp serverler</a>
    <a href="http://www.metin2oyunu.org/metin2-pvp-server-kurma" title="metin2 pvp server kurma" target="_blank">metin2 pvp serverler kurma</a>
    <a href="http://www.metin2oyunu.org/gm-komutlari" title="gm komutlar?" target="_blank">gm komutlar?</a>
    <a href="http://www.metin2oyunu.org/gm-komutlari" title="1299 gm komutlari" target="_blank">1299 gm komutlari</a>
    <a href="http://www.metin2oyunu.org/gm-komutlari" title="gm komutlari knight" target="_blank">gm komutlari knight</a>
    <a href="http://www.metin2oyunu.org/metin2-pvp-server-kurma" title="mt2 pvp server kurma" target="_blank">mt2 pvp serverler kurma</a>

    <a href="http://www.metin2oyunu.org/giris" title="mt2 giris" target="_blank">mt2 giris</a>
    <a href="http://www.metin2oyunu.org/hileler" title="metin2 hile" target="_blank">metin2 hile</a>
    <a href="http://www.metin2oyunu.org/hileler" title="metin2 hileler" target="_blank">metin2 hileler</a>
    <a href="http://www.metin2oyunu.org/metin2-kaydol" title="mt2 kaydol" target="_blank">mt2 kaydol</a>
    <a href="http://www.metin2oyunu.org/metin2-kaydol" title="metin2 kaydol" target="_blank">metin2 kaydol</a>
    <a href="http://www.metin2oyunu.org/resimleri" title="metin2 resim" target="_blank">metin2 resim</a>
    <a href="http://www.metin2oyunu.org/resimleri" title="metin2 resimleri" target="_blank">metin2 resimleri</a>
    <a href="http://www.metin2oyunu.org/resimleri" title="mt2 resimleri" target="_blank">mt2 resimleri</a>

    Wow! I wasn't expecting a 5-star review. I would of picked this up regardless of the review because I loved the original, but it is a nice surpris
    mt2 MMO games
    <a href="http://www.metin2pvpserverlar.com" title="pvp serverler" target="_blank">pvp serverler</a>
    <a href="http://www.metin2pvpserverlar.com" title="pvp serverlar" target="_blank">pvp serverlar</a>
    <a href="http://www.metin2oyunu.org/hileler" title="mt2 hileler" target="_blank">mt2 hileler</a>
    <a href="http://www.metin2oyunu.org/hileler" title="mt2 hile" target="_blank">mt2 hile</a>
    <a href="http://www.metin2oyunu.org/hileler" title="metin2 hilelari" target="_blank">metin2 hileleri</a>

    <a href="http://www.metin2oyunu.org/category/metin2-at-gorevleri" title="metin2 at gorevleri" target="_blank">metin2 at gorevleri</a>
    <a href="http://www.metin2oyunu.org/hileler" title="metin2 gorevler" target="_blank">metin2 gorevler</a>
    <a href="http://www.metin2oyunu.org/category/item" title="metin2 itemleri" target="_blank">metin2 itemleri</a>

    <a href="http://www.metin2pvpserverlar.com" title="pvp serverlar" target="_blank">pvp serverlar</a>

    <a href="http://www.metin2pvpserver.net" title="metin2 pvp" target="_blank">metin2 pvp</a>
    <a href="http://www.metin2pvpserver.net" title="pvp server" target="_blank">pvp server</a>
    <a href="http://www.metin2oyunu.org/gm-komutlari" title="knight gm kodlari" target="_blank">knight gm kodlari</a>

    <a href="http://www.metin2oyunu.org/" title="metin2 oyunu oyna" target="_blank">metin2 oyunu oyna</a>

    <a href="http://www.twittersohbet.com/yonja-sohbet" title="yonja" target="_blank">yonja</a>
    <a href="http://www.twittersohbet.com/netlog" title="netlog" target="_blank">netlog</a>
    <a href="http://www.twittersohbet.com/twitter-turkce" title="twitter turkce" target="_blank">twitter turkce</a>
    <a href="http://www.twittersohbet.com/twitter-giris" title="twitter giris" target="_blank">twitter giris</a>
    <a href="http://www.manolyam.net/mynet-kaydol" title="mynet kaydol" target="_blank">mynet kaydol</a>
    <a href="http://www.manolyam.net/imvu" title="imvu, imvu sohbet" target="_blank">imvu</a>
    <a href="http://www.manolyam.net/mynet-giris" title="mynet giris" target="_blank">mynet giris</a>
    <a href="http://www.manolyam.net/mynet-mirc-indir" title="mynet mirc indir" target="_blank">mynet mirc indir</a>
    <a href="http://www.manolyam.net/mynet-mirc-indir" title="mynet mirc" target="_blank">mynet mirc</a>
    <a href="http://www.faceboksohbet.com/facebok-giris" title="facebok giris" target="_blank">facebok giris</a>
    <a href="http://www.faceboksohbet.com/facebok-kaydol" title="facebok kaydol" target="_blank">facebok kaydol</a>
    <a href="http://www.faceboksohbet.com/facebok-mirc-indir" title="facebok mirc" target="_blank">facebok mirc</a>
  • RE: What will happen to Silicon Valley's boom?

    I think to call it a "boom" is a misnomer. If anything, it was a bubble that if lucky will deflate rather than burst. One of my acquaintances, somewhat of a wise man called Manfred Haldenwang of Esolve Capital, always says: what comes up must come down. An apparent platitude that however is deep and which truth is always forgotten; again and again ...
  • RE:What will happen to Silicon Valley's boom?

    omg i shall download this tomorrow! <a href="http://www.replicawatchesbest.org">cheap replica watches</a>