Errata and Additions

for the chapters written by piero scaruffi
in the book "A History of Silicon Valley" (2011)

  1. sil1. The Pioneers: Early Technologists in the Valley (1900-25)
  2. sil2. The Scouts (1925-40)
  3. sil3. The Moles (1941-48)
  4. sil4. The Engineers (1949-61)
  5. sil5. The Hippies (1961-68)
  6. sil6. The Geniuses (1968-71)
  7. sil7. The Hobbyists (1971-75)
  8. sil8. The Entrepreneurs (1976-80)
  9. sil9. The Warriors (1980-83)
  10. sil10. The Artists (1984-87)
  11. sil11. The Start-ups (1987-90)
  12. sil12. The Surfers (1990-95)
  13. sil13. The iBoomers (1995-98)
  14. sil14. The Other Boomers (1995-98)
  15. sil15. The Survivors (1999-2002)
  16. sil16. The Downsizers (2003-2006)
  17. sil17. The Sharks (2007-10)

sil1 after "Argonaut, located at Montgomery Block." Classical music was represented by its own school of iconoclasts. From 1912 to 1916, Charles Seeger taught unorthodox techniques such as dissonant counterpoint at UC Berkeley. Starting with "The Tides of Manaunaun" (1912), pianist Henry Cowell, a pupil of Seeger, began exploring the tone-cluster technique. That piece was based on poems by John Osborne Varian, the father of Russell and Sigurd Varian, who had moved to Halcyon, a utopian community founded in 1903 halfway between San Francisco and Los Angeles by the theosophists William Dower and Francia LaDue. Varian's sons Russell and Sigurd later became friends with Ansel Adams through their mutual affiliation with the Sierra Club.
sil2 after "just like the hobbyists of radio engineering" In 1935 art historian Grace Morley founded the San Francisco Museum of Art, the second museum in the US devoted exclusively to modern art. Again, San Francisco had its own idea of what "modern art" was. In 1946 Morley hired filmmaker Frank Stauffacher to start the "Art in Cinema" series, that inspired the California School of the Arts to assign a film course to Sidney Peterson. Peterson, who had been a painter and sculptor in France at the time of Dada, directed the manifesto of the San Francisco avantgarde with poet James Broughton: "The Potted Psalm" (1946).
sil2 after "it lasted 16 million visitors came to visit." In 1911 James Phelan had a villa built in the south bay, precisely in the hills of Saratoga overlooking Santa Clara Valley. He had made his fortune during the Gold Rush as a trader and a banker and had then become the mayor of San Francisco and was soon to become a US Senator from California. Phelan had bequeathed this villa (named "Montalvo" in honor of the 16th century Spanish writer who coined the name "California") to the state so that it could be turned into a cultural center to support promising artists, writers, musicians and architects. It took a while, but in 1939, Villa Montalvo opened the doors to an artist residency program, the first one in the Western United States.
The great musical innovator of the Bay Area (and perhaps of the whole country) was Henry Cowell, a bisexual who spent four years in prison for that "crime." In 1930 he commissioned the Russian instrument builder Leon Theremin to create the first electronic rhythm machine (the "Rhythmicon"). Cowell later taught the influential course "Music of the Peoples of the World" at UC San Francisco (already tested in 1933 at the New School for Social Research in New York) promoting atonality, non-Western modes, percussion ensembles, and even chance composition. He also was probably the first classical composer to live a parallel life as a successful pop songwriter. In San Francisco his pupil Lou Harrison took advantage of the Bay Area's ethnic Babel and incorporated Chinese opera, Native-American folk, jazz, and later the gamelan music of Indonesia into Western classical music. In New York, his other pupil John Cage became famous by expanding on several of his master's intuitions.

sil2 after "spreading to the north, east and south." At the time San Francisco was famous around the country for its ethnic diversity, but little else. At the end of the 1930s San Francisco was still a relatively lawless place. A popular joke was that the organized crime of Chicago and New York had no chance to infiltrate San Francisco because the entire city was just one big racket.
sil4 after "At the same time the city still maintained the old sexually permissive atmosphere" insert

In 1955 the police staged a coordinated campaign of persecution against homosexuals, but its outcome was to cement solidarity within that community, and, for example,

sil4 after "This was an important step towards automating a factory" insert:

What numerical control did was to introduce the concept of "real time" in commercial computing. It placed the computer inside a "living" system, the factory. The computer was no longer an isolated machine that could compute an exotic scientific problem in isolation and leisurely, but a cog in a complex clockwork that had to interact with other machines on the fly. For these applications the sensor was as important as the processor.

sil4 after "Within ten years it would become the main employer of the region." In 1957 Paul Cook opened Raychem in Redwood City to manufacture wires and cables for the military and aerospace industries.
sil4: remove the sentence "In 1959 there were about 6,000 computers in the USA."
sil5 before "The revolution was widespread and octopus-like" insert: The gay community, which on New Year's Day of 1965 had staged a widely publicized "Mardi Gras Ball", was indirectly a beneficiary of the hippie phenomenon. Eureka Valley, the area south of the Haight-Ashbury (the headquarters of the hippies), was a conservative middle-class neighborhood that did not quite appreciate the crazy circus going on a few blocks away. Many families decided to emigrate to the suburbs and the Eureka Valley became a ghost town. Gay couples, unwelcome elsewhere, were able to snatch up cheap Victorian homes and renovate them. The district soon became known for its main street, Castro Street.
sil7 after "large numbers" Arthur Evans formed the "Faery Circle" in San Francisco in 1975. It evolved into the "Radical Faeries" movement at a conference held in Arizona in 1979 and later became a worldwide network of groups that mixed gay issues and new-age spirituality and that staged hippie-style outdoors "gatherings".
sil7 replace "notably Southern Exposure in 1974 and New Langton Arts in 1975" with notably Southern Exposure in 1974, New Langton Arts in 1975 and Gallery Paule Anglim in 1976.
sil8 after "majority of microprocessors were going into all sorts of other appliances, calculators and controllers"

An impressive phenomenon of the era was the number of hardware spinoffs launched by enterprising Chinese immigrants trained in some of Silicon Valley's most advanced labs: Compression Labs (CLI) by Chinese-born Wen Chen (1976) to make video conferencing and digital television components; Solectron by Roy Kusumoto and Winston Chen (Milpitas, 1977) to make printed circuit boards; Data Technology Corporation (DTC) by David Tsang (Milpitas, 1979) for floppy-disk and hard-disk drives; Lam Research by David Lam (Fremont, 1980) for equipment for chip manufacturing (or "etching"); Integrated Device Technology by Chun Chiu, Tsu-Wei Lee and Fu Huang (San Jose, 1980) for semiconductor components; Weitek by Edmund Sun, Chi-Shin Wang and Godfrey Fong (San Jose, 1981) for chips for high-end computers; fiber-optic pioneer E-Tek Dynamics by Ming Shih (San Jose, 1983); magnetic-disk manufacturer Komag by Tu Chen (Milpitas, 1983); etc.

sil9 replace "SUN (1981)" with "SUN (1982)"
sil9 move "Borland was founded in 1983 in Scotts Valley (between San Jose and Santa Cruz) by three Danish developers (Niels Jensen, Ole Henriksen, and Mogens Glad) and Philippe Kahn, a Frenchman who had cut his teeth on the Micral project. They targeted the growing needs not of the end user but of the software developer. " after "software to help build other software."
sil9 change the header



Lasers and Nanotechnology

sil9 after "based in Silicon Valley that did not achieve momentum" insert Micro-Electro-Mechanical Systems (MEMS) represented the infancy of nanotechnology. These were miniaturized devices made of microsensors, microactuators and microelectronics. In 1982 Kurt Petersen wrote the influential paper "Silicon as a Mechanical Material" and founded Transensory Devices in Fremont (later IC Sensors in Milpitas), a pioneering company in commercializing MEMS devices. Petersen envisioned "a broad range of inexpensive, batch-fabricated, high-performance sensors and transducers easily interfaced with the rapidly proliferating microprocessor."

In 1980 Stanford Electrical Engineering professor John Linvill had the idea for the Center for Integrated Systems, a lab that, working in close interaction with the industry, was to bring together material, hardware and software engineers for the purpose of designing integrated circuits. For example, Gregory Kovacs would design sensor systems that combine detectors on silicon wafers the same way electrical circuits are integrated on computer chips.

sil9 after "Intel 8088 and the maps were stored on cassette tapes.": Few people heard of "Elk Cloner," a program that a 15-year-old high-school student, Rich Skrenta, unleashed on an Apple II in 1982. It was the first personal-computer virus. Elk Cloner was capable of spreading from floppy-disk to floppy-disk, and therefore from computer to computer. What this hacker had implicitly realized is that the widespread adoption of personal computers had de facto connected millions of people (even though the "connection" still relied on copying files on floppy-disks).
sil10: replace "Computers had become vulnerable to contagious diseases just like living beings." with The virus had been created in faraway Pakistan by the owners of Lahore's computer shop Brain. The original personal-computer virus "Elk Cloner" had done relatively little damage because it was confined to the Apple II world, but the widespread adoption of the IBM PC standard had created a whole new world of opportunities for digital contagion.
sil10 beginning of "Office Automation" Desktop publishing was not new to the users of (more expensive) Unix workstations. Boston-based Interleaf, founded by David Boucher and Harry George (two former associates of Kurzweil Computer), had introduced a document processor that integrated text and graphics editing for the Unix workstation market. Steve Kirsch saw an opportunity in that idea and founded FrameTechnology in 1986 in San Jose to commercialize FrameMaker, a publishing platform invented by British mathematician Nick Corfield. But those were products for the high end of the market.
sil12 after "The craze that followed Netscape's IPO became known as "dot-com craze". Netscape did more than simply start a new gold rush. It made the Web easy to navigate for anybody, as long as they knew how to type on a keyboard and they could find a computer connected to the Internet. It leveled the playing field so that the illiterate computer user could browse the Web the same way that a pro did. Thanks to Netscape's browser, the shapeless and non-intuitive cluster of digital information that had accrued on the Internet became intelligible and meaningful to everybody. This in turn prompted more and more people to add content to the Web. It now became clear that one boom had enabled the other one: the personal computer boom of the 1980s had placed a computer in millions of households, and that now constituted the vast public of the Web. A key factor was that the Netscape browser was free for individuals and non-profit organizations. Netscape also "protected" the Internet from monopolies that would have loved to hijack it. Its browser used open standards and indirectly forced much larger corporations to adopt those same standards, thus avoiding the kind of wars that still plagued the world of operating systems.
sil12 after "free Acrobat reader for it" insert: The boom of graphic applications led to a demand for better graphic processors. Santa Clara-based Nvidia was a fabless semiconductor company founded in 1993 by Jen-Hsun Huang, previously at LSI Logic and AMD, and two SUN engineers (Chris Malachowsky and Curtis Priem) to design graphic chipsets for personal computers.
sil12 move the sentence about "Cisco had entered the Ethernet" before "In 1990 Marc Porat at Apple" and change it with Communications were also driving rapid progress. Cisco had entered the Ethernet switch business by acquiring Crescendo Communications in 1993 and Kalpana in 1994. By 1997 Ethernet switching was producing more than $500 million in annual revenues for Cisco.

C-Cube, started in August 1988 in Milpitas by Weitek's Edmund Sun and Alexandre Balkanski, had already begun making chips for video compression technology (MPEG codecs).

sil12 add "virtually" before "inexistent in Silicon Valley". And move after this sentence the existing sentence Cell-phone technology truly came to the Bay Area in 1992, when Martin Cooper (Motorola's prophet of cellular phones) established ArrayComm in San Jose to improve the capacity and coverage of cellular systems. While not particularly successful, ArrayComm would train and spread alumni in the region."

Redwood City-based Unwired Planet (founded in december 1994 by Alain Rossmann as Libris and later renamed Unwired Planet, and finally Openwave) pioneered mobile Internet browser software technolony (or "microbrowser), for which it pioneered HDML (Handheld Device Markup Language), basically an HTML for handheld devices. While most companies in the mobile-phone business were busy adopting the "push" paradigm of SMS, Openwave adopted its own "pull" paradigm. One year later Openwave and three giants of mobile communications (Ericsson, Motorola and Nokia) would turn HDML into WML (Wireless Markup Language), the international standard for cell phones to access the Internet.

sil12 after "cloud computing". EO, launched in 1991 by French-born C-Cube's executive Alain Rossmann to manufacture a personal digital assistant that was also a cellular telephone using GO's PenPoint operating system that recognized handwritten commands (basically, the hardware "arm" of GO).
sil13 before "At Stanford six students started the project Architext in february 1993." In February 1995, Steve Kirsch launched the search engine Infoseek, based in Sunnyvale. It pioneered "cost-per-impression" and "cost-per-click" advertising. Yet the company's main claim to fame might be that it raised Li Yanhong, the engineer who in 1999 moved to China and co-founded the Chinese search engine Baidu.
sil13 after "millions of ordinary homes." Fiber optics are made of thin glass wires. Optical switches convert the digital signals into light pulses. The light pulses are transmitted over these optical cables instead of the copper wires of the traditional telephone lines. The boom for optical cables began in 1996, when the US government enacted the Telecommunications Act that deregulated the telecom market. This created ferocious competition among local and global telecom companies at the same time that the pundits predicted an exponential rise in broadband need due to the advent of the Web.
sil13 replace "for everything. A community" with "for everything. Meanwhile, a community"
sil13 after "that cost $5,000." Apache made it possible for anybody to start a website on their own home or office computer, thus increasing the amount of content and the number of applications that reached the Web.
sil13 after "Luxn of Sunnyvale, etc." The world was suddenly awash in fiber-optic cables. This overcapacity, not mandated by governments but simply the result of business miscalculations, dramatically lowered the cost of broadcasting information, thereby increasing the motivation to broadcast information. The fiber-optic rush created on the Internet the equivalent of the freeway system created by the US government in the 1950s. It did so rapidly and at no cost to the taxpayer. The cost was political: the vast fiber-optic infrastructure did more than connect the nation electronically: it connected the nation to India too, thus accelerating the process of outsourcing IT jobs to India.
sil13 after "and had lost $643,000": An alternative approach to indexing the Web was pursued by the Open Directory Project (originally Gnuhoo), a public index of websites launched in June 1998 by SUN's employees Rich Skrenta (the inventor of the first personal computer virus) and Bob Truel. It was a collaborative effort by thousands of volunteer editors, initially modeled after the old Usenet. ODP was acquired by Netscape in October 1998. It surpassed Yahoo!'s directory sometime in 2000.
sil14 after "specializing in photonic integrated circuits" A merge of biotech and nanotech (Micro-Electro-Mechanical Systems or MEMS) took place in 1996 with the founding of Cepheid in Sunnyvale by former Syntex executive Thomas Gutshall, Bill McMillan (who had invented a rapid automated analysis system at Syntex), MEMS pioneer Kurt Petersen (of Transensory fame), and Greg Kovacs of Stanford's Center for Integrated Systems. Their goal was to build machines that perform rapid molecular testing, typically to detect infectious disease and cancer, i.e. to provide DNA test results when and where they are needed.
sil15 replace "free content index" with "free content"
sil15 after "The Faustian deal for Google's rapid success was AdWords, a pay-per-click advertising system, by far its main source of revenues. " insert: Google had started selling "sponsored links" in 2000, a practice already followed by their rivals. This was a manual process involving a salesperson and it mainly targeted large corporations. AdWords, instead, introduced in 2002, was mostly automated and, because it slashed the price of posting an advert on the Web, it targeted medium and small businesses that had been reluctant to advertise on the Web.
sil15 after "sell and buy over the Internet." Paypal was another case, like Netscape before it, of the public choosing a standard before either government or corporations could do so.
sil15 after "and Society (CIS) "to improve Internet privacy practices" insert the paragraph:


The key difference between this generation of the Web's users and the previous generation was not so much in the number of people who were browsing it but in the number of people who were uploading content to it.
Digital content had been around for decades. The vast majority of archives in the developed world had already been converted to databases. Large amounts of text had been scanned and digitized. New text was almost all in digital form. No other appliance since the ice box had disappeared so rapidly from households like the typewriter did in the 1990s. The telex had been replaced by e-mail. Newspapers and magazines had converted to digital composition. And now an increasing number of individuals were producing digital texts at an exponential pace, whether students writing their essays for school or adults writing letters to friends. Digital cameras and digital recorders were flooding personal computers with digital images and sounds. Napster-like services were popularizing the idea that a song is a file.
All this digital material was available, but it had been largely kept private on someone's home or work computer. The browser and the search engine, by definition, had encouraged people to "download" information from the Web, not to "upload" information to it. Wikipedia, blogs, P2P tools, social networking sites and soon YouTube and Flickr heralded an era in which the rate of uploading was going to almost match the rate of downloading. In fact, uploading was becoming a form of entertainment in itself. The 1990s had been the age of democratizing the Internet. The 2000s witnessed the democratization of the "uploading": more and more individuals began to upload their digital content to the Web in what became one of the most sensational processes of collective knowledge creation in the history of humankind.

sil15 after "from its chemical code that they had simply downloaded from the Web." The pharmaceutical industry kept growing in the area around South San Francisco, fueled in no small part by Stanford's School of Medicine. For example, in 2002 Israeli-born professor Daria Mochly-Rosen started KAI Pharmaceuticals.
sil16 after the header "Digital Entertainment" introduce new paragraph The Aging Internet
sil 16 after "business model for advertisers" insert: instead of the traditional "per view" model. GoTo had also introduced the idea of letting advertisers bid to show up higher in the results of a search (the "pay-for-placement" model).
sil16 after the header "Digital Entertainment" introduce new paragraph

The Aging Internet

The dramatic success in the 2000s of the new business models of Netflix (videos), YouTube (videos), Apple (music), Facebook (news), Google (news) and Twitter (news) was beginning to bring out a fundamental problem of the Internet. All these services depended on the ability to distribute content over the Internet Protocol (IP). In other words, the Internet was increasingly being used as a media distribution network (in other words, to access data). Unfortunately, it had been designed to be a (host-to-host) communications network. The Internet was becoming simultaneously the world's greatest distribution network and one of the world's worst distribution networks. Nobody was proposing to dump the Internet yet, but it was obvious that the system needed to be tweaked. In particular, the router had to be reinvented. In 2006 Xerox PARC came up with Content Centric Networking (CCN), a project under the direction of Van Jacobson of Cisco and the Lawrence Livermore Laboratory. CCN was an idea already pioneered by Ted Nelson in 1979 and developed by Dan Cheriton at Stanford in 1999 Scott Shenker at UC Berkeley in 2006. It aimed at redesigning the Internet around data access.

sil16 after "downloads and harmed computers)." insert Intel capitalized on the popularity of the Web with a new generation of microprocessors. Wi-Fi became a household name after Intel introduced the Centrino for laptops in March 2003 (largely the vision of Indian-born Anand Chandrasekher). From that point on a laptop would be associated with wireless Internet as much as with mobility.
sil16 after "tilted the balance towards the ebook." The company that democratized video was instead based in San Francisco: Pure Digital Technologies, originally founded in 2001 by Jonathan Kaplan to make disposable digital cameras. In May 2006 it launched the Flip video camera, sold in popular department stores at an affordable price. Designed for direct conversion to digital media and particularly for Internet video sharing, it helped countless unskilled users of the Internet become amateur filmmakers. In just 18 months PDT sold 1.5 million of its one-button camcorders and became the leader of that market. The lesson to be learned here was that the smartphone was going to threaten the existence of entire lines of products, well beyond voice communication.
sil16 after " Bloglines, the first Web-based news aggregator." Digg, founded in November 2004 by serial entrepreneur Jay Adelson in San Francisco, pioneered the idea of letting visitors vote stories up or down (i.e., "digging" or "burying"), thus bridging the world of news aggregators and social networking.
sil16 after "Bloglines, the first Web-based news aggregator" It was soon followed by Topix, launched in 2004 by Rick Skrenta of Open Directory fame,
sil16 after "the business strategy, not the inventions" Google's real innovation was in the field of advertising. In June 2003 Google introduced AdSense, designed by Paul Buchheit, that constituted a vast technological improvement over AdWord: content-targeted advertising. AdSense was capable of "understanding" the topic of a webpage and therefore automatically assign to it the relevant ads among all the ads provided by paid advertisers. By systematically monitoring the behavior of its search engine's users, Google had invented (or, at least, perfected) an automated system 1. for advertisers to create more effective ads, 2. for Google itself to display more relevant ads, and 3. for users to view the most relevant ads. The traditional ad in a newspaper had mostly been a one-sided decision, based on what an advertiser wanted to print and how much it was willing to pay, mediated by one of the newspaper's salespeople. In Google's world the ad became a computer-mediated deal among three entities: the advertiser, Google's AdSense and the user. Basically, AdSense created an infinite feedback loop that allowed advertisers to continuously improve their adverts, and at the same time promoted a race among advertisers to develop the "fittest" ad in a sort of Darwinian process. If previous progress in search-based advertising had lowered the barrier from large corporations to small businesses, AdSense enabled any content provider (from established news media to the smallest website on a rock star run by a teenage fan) to monetize its content. Of course, this also led to an alienating process in which very serious texts were being used to publicize trivial products (famously AdSense associated ads about plastic bags with the news of a murderer who had stuffed its victim's body parts in a plastic bag). The new landscape for advertisers was the whole behavior of the user, that Google monitored as much as possible through the user's searches. Thus, for example, someone dying of cancer and desperately searching the Web for medicines and devices would automatically be turned by AdSense into a golden business opportunity for any company advertising those medicines and those medical devices.
sil16 after "but that would come later." The Bay Area had a mixed record in the field of photography, with only the Flip gaining ephemeral momentum for a few years. Lytro was founded by Stanford's computational mathematician Ren Ng in 2006 and based in Mountain View. It aimed at designing more than a cheaper better camera: it went for the light-field cameras, a camera capable of capturing much more information and therefore of creating a much richer digital representation of the scene. The most obvious benefit was to be able to refocus the image after having taken the picture. The technology had been originally invented at the MIT Media Lab in 1992 by John Wang and Edward Adelson. Yet it was Mark Levoy's team at Stanford University that made it fit for the consumer market.
sil16 after " convert sunlight into fuel." Sebastian Thrun at Stanford built the robotic car that in 2005 won a "race" sponsored by the Pentagon in a California desert. Thrun was then hired by Google to work on autonomous vehicles that, in following years, would be seen driving over California highways with only one person in the car: the passenger.
sil17 after "two Oxford University's students, Mark Cummins and James Philbin." Chrome OS was first released in November 2009. It was a variant of the Linux-based operating system Ubuntu that was developed in Britain by Mark Shuttleworth's Canonical.
sil17 change "In 2011 Google acquired" with In 2011 Google tried to acquire discount-coupon site Groupon,
sil17 after "In july 2009 it was acquired by Facebook." Facebook indirectly also set a new (low) standard for creating a startup. In the fall of 2007 B. J. Fogg, an experimental psychologist who was running the Persuasive Technology Lab at Stanford, instructed his students to create Facebook applications with the only goal of having as many people as possible use them in as short a period of time as possible. The students were forced to create no-frills applications whose main asset was that they were easy to use and spread around. That class alone created a number of millionaires because many of those applications became hits on the Facebook ecosystem. These Stanford CS student authors went on to join successful companies. They had just hit on a new formula to create a successful product: just make it easy to use and spread virally. You can always refine it later.
sil17 after "increase of 56% over the previous year" insert It was not unusual for Silicon Valley to be late on innovation, but this was embarrassing for a region named after silicon. All the big providers of chips for smartphones (San Diego-based Qualcomm, Texas Instruments, Korea-based Samsung, Irvine-based Broadcom) except for Marvel were based outside the Bay Area. Even the iPhone used a chip manufactured by Samsung.
sil17 after "and hired people in different states" These startups of the "gift economy" were annoyed by the pressures of investors. Therefore it came as no surprise that in April 2010 Jared Cosulich and Adam Abrons founded Irrational Design with the explicit goal of not seeking venture capital. The "business plan" of the startup was to be creative, with no specific product in mind. Venture capitalists were perceived as hijacking the minds of the founders to focus on a lucrative product. Irrational Design was emblematic of a generation that aimed for precisely the opposite: let the minds of the founders invent at will, with no regard for market response or potential acquisitions.
sil17 after "Documentum, Legato and VMware. " The next step after virtualizing the operating system and the databases was to virtualize the network, which was precisely the mission of Palo Alto-based Nicira Networks, a 2007 spin-off of a joint Stanford-Berkeley project.
sil17 after "funded by Vinod Khosla. " Innovation, as in the past, was not really coming from Silicon Valley, though. The big news in greentech came from Boston-based 1366 Technologies (founded by MIT professor Ely Sachs in 2007), that developed a more accurate way to cast the silicon wafers for solar cells so that solar cells can be produced at lower costs. This company was leapfrogging Silicon Valley startups using a typical Silicon Valley model: partnership with the DARPA to bring the technology to maturity and then application to a commodity product.
sil17 after " popular services (e.g., real-time news) as an extension of the browser." The other thing that had not changed much since the invention of the Web was the search engine. While Google dominated the field, its search engine was largely agnostic about the contemporary boom of social networks. The emergence of "social search" technology was well represented by Blekko, founded in Redwood Shores in June 2007 by Rich Skrenta. He was the high-school hacker who had created the first personal-computer virus in 1982; the SUN guru who had created the Open Directory Project; and the entrepreneur who had created Topix. It was basically a hybrid approach that mixed the traditional machine-powered search engine with the human-powered wiki.
sil17 after "in 2010 it posted record sales again." In March 2009 AMD spun off its manufacturing unit to create GlobalFoundries. Within a year it became the world's second largest silicon-chip foundry company after Taiwan's TSMC.
sil17 after "could be achieved by downloading one's consciousness onto a computer)." The Seasteading Institute, founded in 2008 in Sunnyvale by Patri Friedman, envisioned cities floating in the middle of the ocean as utopian libertarian communities to experiment with alternative social systems.
sil17 after "Apple's market capitalization ($227 billion) passed Microsoft's ($226 billion)." In August 2011 Apple passed ExxonMobil to become the most valuable company in the world based on market capitalization.
sil17 after "anyone (anyone) could use it, even blind people without arms or legs." An important ideological change was taking place inside the Bay Area's universities about using new digital media to export knowledge to the rest of the world. For example, Khan Academy was launched by Salman Khan to make a free K-12 education available through short instructional videos on YouTube. Copying that idea in 2011, Stanford professors Peter Norvig and Sebastian Thrun created free courseware on the Web that could be accessed by students worldwide.
Sil17 after "for cylindrical solar cells at the cost of $733 million." Insert but then Solyndra went bankrupt in september 2011 leaving behind mostly doubts about the whole industry.
sil17 after the section "The Naked Empire" add a new section:

Google vs Apple vs Facebook vs...

During the 2000s, Google largely represented the battle between the Web-based world against the desktop-based world of Microsoft. Google won this ideological battle, as even Microsoft was beginning to move towards cloud-based applications. Yet Google made little money out of it. Mostly it was the big virtualization platforms that were benefiting from this epochal switch in computing platforms. Google and Facebook were growing thanks to business plans that relied almost exclusively on selling advertising. They both offered a free service (in Google's case, many free services) based on content (text, images, videos, posts) provided for free by millions of "volunteers" (the public of the Web). Both companies made money by selling advertising space to companies eager to publicize their products to the viewers of all that content. Neither Google nor Facebook was creating any content. They were just being parasites off of other people's content. Neither had found a way to make money other than through advertising techniques. From a strategic point of view there was a difference between the two though.
Google's search engine had been invincible for a few years, but by the end of the decade it was increasingly weaker than other kinds of businesses. It was becoming apparent to Google's own management that the switching cost for a user to adopt one of the newer (and perhaps better) search engines was virtually zero. The network effect of a search engine is low by definition (a network effect is how much the value of the product depends on the number of users using it). On the contrary, Facebook enjoyed both high switching costs that kept users from leaving and so its network effect was very high (the more people that used it, the more valuable it was). It was no surprise then that in 2011 Google announced Google+, its second attempt at establishing a viable social-networking platform (after the embarrassing Buzz). By then Facebook had passed 750 million users.
At the same time Google invested in the smartphone market. In July 2008 Apple had launched the App Store for iOS applications (an iOS device was an iPhone, iPod Touch or iPad). By July 2011, the App Store had 425,000 apps (uploaded by thousands of third party developers), downloaded 15 billion times, on 200 million iOS devices. By then Google's equivalent, the Android Market, had 250,000 applications, downloaded 6 billion times, on 135 million Android devices; and it was growing faster. Google was activating new Android devices at the rate of 550,000 per day.
Google's management, probably aware that Google's successes tended to be the ones acquired from others as opposed to the ones developed internally, launched Google Ventures, the venture-capital arm of the company. Basically, it was beginning to make sense for Google to invest its huge cash reserves into other companies rather than into Google's own R&D. Google was trying yet another revolutionary business model: to become an incubator of startups (infotech, biotech and cleantech). As an incubator, it offered a much more powerful infrastructure than a venture capitalist could, starting with office space at its Googleplex and computing power in its gargantuan server farm. Google even offered a huge bonus ($10,000 in 2011) to any employee who suggested a startup resulting in an actual investment.
The company that was rapidly losing its sheen was Yahoo! Its advertising business remained strong but Yahoo! had done the opposite of Google: invested in creating content, even hiring journalists and bloggers. Yahoo! had basically moved towards becoming a media company at a time when Google and Facebook had been moving towards the more cynical model of purely exploiting the content created by their users. In a sense, Yahoo! still believed in quality at a time when Google and Facebook were proving that quality did not matter anymore and that advertising revenues depended almost exclusively on quantity. To make matters worse, Yahoo! had not contrived a way to have its users disclose personal information the way Google and Facebook had, which meant that Google and Facebook (happy to violate as much privacy as tolerated by the law) could offer targeted advertising to their advertising customers.
Another front in the multiple wars that Google was fighting was the intellectual-property front. In November 2010, a consortium including Microsoft, Apple, Oracle, and EMC paid $450 million for 882 networking-software patents owned by Novell, or about $510,000 per patent. They were not interested in Novell's technology, but simply in protecting themselves from potential lawsuits. In June 2011 a consortium that included Microsoft, Apple, Ericsson, Sony, EMC, and Research In Motion purchased the 6,000 patents for wireless communication owned by bankrupt telecom company Nortel. They paid $4.5 billion, or $750,000 for each patent. Microsoft now co-owned the Nortel patents for voice services and the Novell patents for Linux, while Apple co-owned the Nortel patents for manufacturing and semiconductors and Oracle owned the patents for Java (acquired from SUN). Google's Android service was left naked and subject to lawsuits. In August 2011 Google paid $12.5 billion for Motorola's smartphone business in order to acquire its 24,500 patents, which was about $510,00 per Motorola patent. The purpose became clear a few days later: Apple had levied multiple lawsuits against Android-based smartphone manufacturers like HTC and Samsung, accusing them of "copying" the iPhone, and now HTC was in a position to sue Apple using some of the patents purchased by Google.

The Saga of Apple

In July 2011 Apple had more cash and securities ($76 billion) than the cash reserves of the government of the US (which was facing a temporary liquidity crunch due to debt ceiling debates). Google was on a buying spree (basically an admission of inferior technology) while Apple rarely bought anything from others (an impressive demonstration of technological superiority). Apple had always been a strange company, a distant second to Microsoft in operating systems for personal computers, but possibly better respected than Microsoft (certainly so in Silicon Valley), as if Microsoft's rise was mere luck while Apple's survival was pure genius. Meanwhile, Apple continued to refine its MacOS to the point that Microsoft's Windows look positively troglodytic to the Apple base. The iPod and the iPhone increased Apple's reputation in designing wildly appealing products, even though neither fully dominated its market (there were lots of digital music players, and Google's Android was growing a lot faster than Apple's iOS). The MacOS and iOS had, however, an incredible following worldwide, unmatched by any other desktop and mobile software platform. And, last but not least, Apple ruled the handheld tablet market with the iPad (almost 70% of the marked in mid-2011). Apple had never embraced social computing (just like it had been slow to embrace the Internet to start with) and it was late in cloud computing (the iCloud was announced in June 2011). Yet there was a general feeling that Apple did things only when it was capable of stunning the world. No other company could afford to be so late to the market and still be expected to make a splash. The philosophical difference between Google and Apple was even wider than between Google and Microsoft: Apple still conceived the Web as a side-effect of computing, not as the world inside which computing happens, whereas Google (whose slogan was "nothing but the Web") was pushing the vision of the Web as "the" computing platform. Google's business model was even more profound: it was making (mostly buying and distributing) relatively trivial technology and letting people use it for free (with the advertisers footing the bill), de facto turning the Web into a giant advertising billboard. Meanwhile, Apple was expecting people to pay a premium for its devices and services, just like any other traditional, quality-branded good. In fact, one of Apple's great and unlikely success stories was its retail stores: the "Apple store" was popular worldwide, making Apple of the most valuable brands in the world. In July 2011, revenues from its retail stores were $3.5 billion, up from $2.6 billion the previous year (2011 was a terrible year for the whole Western economies). Apple was planning to open 40 new stores in the following six months, mostly abroad. Google was trying to make computing more or less free, while Apple was trying to make computing as fashionable as cosmetics and apparel. Apple's success was frequently viewed as the work of one man, Steve Jobs; but Jobs had to retire in August 2011 for health reasons.
sil18 after "One can argue that such a closed system is designed to create hyper-specialists and stifle creativity." Meanwhile, the infrastructure of Silicon Valley, and of the US in general, risks falling behind the ones in the most advanced European countries of Asia and Europe. Gone are the days when it was Asians and Europeans who would marvel at the transportation, the technology, and the gadgets of Silicon Valley. It is now the other way around. Silicon Valley does not have anything that even remotely resembles the futuristic clean and fast public transportation of Far Eastern metropolises (the magnetic levitation trains, the multi-layered monorails, the bullet trains). Its households have to live with one of the slowest and most expensive "high-speed" Internet services in the world. Cellular phone coverage is poor everywhere and non-existent just a few kilometers outside urban areas. US tourists abroad marvel at what the Japanese and the Germans can do with their phones.
sil18 after "and status. Hence chance, hence creativity." The golden question is why Silicon Valley worked for some sectors and not for others. It failed in laser applications, although it had a head start, and it never made a dent into factory automation (despite a head start in robotics). My guess is that the individual is not enough: it takes a community of inventors. The defense industry created that community for the radio engineering and the semiconductor industry. The venture capitalists are creating it for biotech and greentech. Factory automation, however, despite the potential of causing one of the most dramatic changes in human society, was largely left to heavy industry that was not based in the Bay Area. The Defense Department created that community elsewhere. The Japanese government created it in Japan. Nobody ever created it in Silicon Valley. The whole premise of numeric control (coupling processors with sensors) remains largely alien to Silicon Valley.
sil18 after "besides Sony, Microsoft and Motorola. " In 2005 Taiwanese companies produced 80% of all personal digital assistants, 70% of all notebooks, and 60% of all flat-panel monitors.
Add to the timeline: 1980: The largest semiconductor manufacturers in the world are: Texas Instruments, National, Motorola, Philips (Europe), Intel, NEC (Japan), Fairchild, Hitachi (Japan) and Toshiba (Japan). 1987: The largest semiconductor manufacturers in the world are Japan's NEC, Japan's Toshiba and Japan's Hitachi 1992: Intel becomes the world's largest semiconductor manufacturer, passing all its Japanese rivals 2007: The world's largest vendors of personal computers are HP, Dell, Taiwan's Acer, China's Lenovo and Japan's Toshiba
Additions after September 2011