Trends

Silicon Valley is fortunate to have leading companies in large industries — media, computer/devices, and micro-processors. With lots of cash on the balance sheets, confident execs, and smart folks on the payroll some of these growth companies (Google, Apple, HP, etc.) in these industries are starting to expand out of their core business. This expansion has been pushing the pendulum to a point where the concentration of power in Silicon Valley may soon hit a wall.

Lets have a quick look at the current lineup of major industries in the Valley and the top players in those industries:

Media companies

• Google
• Yahoo (ok, 9% growth is not exactly hitting it out of the park, but there is untapped potential here — full disclosure: i work at yahoo)

Computer/devices companies (both of these companies are on a tear)

• HP
• Apple

Micro-processor companies

• Intel
• AMD

Well — when times are good folks start to expand beyond their core and these companies are expanding — especially the folks at Google — into the following industries:

• Wireless & Telecom
  • iPhone
  • Gphone
  • Buying wireless spectrum: Apple & Google are each other
  • Undersea fiber: Google
• Entertainment
  • Apple TV & iTunes –> distribution hub for all entertainment
• Energy (alternative forms)
  • Silicon Valley in general is playing a major role in this space — however with the exception of Intel and AMD the companies above are more dabbling then anything else — but $20M here and $30M there and it becomes a bit more then dabbling.

For the past 4 years the pendulum has been swinging in favor of these Bay Area companies but when you expand beyond the core you inevitably start to piss off the legacy players… Once these legacy players start fighting back and the economic slowdown forces these companies to curtail their investments beyond the core will the pendulum reverse?

Farecast is a great service — here’s why:

1. Clever use of free data (costs a ton to process this much data, but the data itself is free)
2. Deliver the right information (will fare’s increase or decrease) at the right time (at the point of search or transaction)
3. Leverages consumers fear of overpaying. 

However, will your average consumer spend enough time to grok how this works — not sure about that one.  Some good marketing folks will be needed on this one.