Archive for December, 2008

In the fine print of a  jobs report published today is some mixed news for Silicon Valley.
For the first time in this downturn, the region lost jobs; it has 4,000 fewer jobs than it did a year ago at this time, and its unemployment rate is 7 percent, according to the Center for the Continuing Study of the California Economy, which analyzed the California Bureau of Labor jobs data.

That rate compares favorably to California over all, which has an 8.4 percent unemployment rate, the research firm reported.  “California is following the nation into the longest and deepest national recession since the 1980s and, possibly, since the Great Depression,” writes Steve Levy, the firm’s research director.

As for Silicon Valley, he asserts the fundamental economic strengths of the region put it in a relatively good position, but a vulnerable one nonetheless. “Silicon Valley will enter the recession from a stronger position and be in a stronger position when the recession ends BUT the next 12 months will bring recession to the Valley — more job losses and rising unemployment,” he wrote in an e-mail message.

At this point, that sounds like a far cry from the technology-centric implosion of 2000 when unemployment hit 9.2 percent. Perhaps, even, the valley will benefit from stimulus and infrastructure spending by an Obama administration that favors the green technology that Silicon Valley’s venture investors — and big compa nies too — have banked on heavily.

Meantime, company executives and workers here say this downturn feels different from the dot-com bust. Then, the downturn felt more specific to the region. Not just tech companies, but commercial and residential real estate brokers, restaurant owners, hairdressers — everyone in the region — felt the pain of the bust, directly or indirectly. As one tech industry worker told me the other day, “When the bubble burst in 2000, it felt very personal to those working in the Web world.”

This time is less scary for some here because the pain is less concentrated and localized. On the other hand, there is a sense that this downturn has less of a simple explanation, and thus the factors behind it fell more out of control. The person I spoke to, a manager at a Web design firm, said: “It’s different because it’s everyone.”

By Matt Richtel

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When i was growing up in New York City, during the holiday season of Hanukah and Christmas, we always used to watch the Bob Hope specials. They were entertaining, funny, poignant, but most of all they focused on the “Troops”.

Let us not forget the lessons of history. This nation was founded, grew and maintains our freedoms of democracy today on the courage, selflessness, blood and guts of young men and woman.

On this holiday season, if you see a serviceman or servicewoman, go over to them and say “Thank You”.

In June of 1968, while I was completing basic training, a couple came over to me, handed me a $ 20 bill and said “thank you for your service and go out and enjoy yourself”. Well a $ 20 bill is not what it used to be, but I will never forget that thoughtfullness.

So, on this Holiday Season, acknowledge our military personnel. You will feel better as an American and a person.

May your families be healthy, be safe and enjoy.

Steve Gerbsman

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Sales of video game software grew far less rapidly in November than they did in October, according to a report published Thursday by the NPD Group, a market research firm.

The data suggests that the video game market, which industry executives and analysts have characterized as relatively recession-proof, is feeling the pinch of consumer caution.

For the month of November, software sales in the United States were $1.45 billion, up 11 percent from the same month a year earlier. But that growth rate is down sharply from October, when sales were up 35 percent over a year ago.

More broadly, sales in the video game market over all — which includes software, hardware and accessories — rose 10 percent in November as compared with a year ago. In October, the increase was 18 percent.

Click here to read the full article at NY Times.com

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We also say “thank you” to our clients, advisors, business partners and all the people the team has been involved with. Gerbsman Partners’ goals have been and always will be, to “Earn the Trust and Confidence” of our clients, and to maintain the highest standards of “Ethics and Integrity”.

As we enter this New Year, we are living in challenging times that our generation has not seen before. The economy, jobs, financial concerns, the security of our nation and the concern regarding the health care system support for our families. However, we look to the New Year with “Hope for the Future” and with the belief that the heritage of our nation and its leaders will continue to demonstrate the values of life, liberty and the pursuit of goodness.

Please accept our appreciation for your past support, confidence and continued trust. May 2009 be a successful, stable and profitable year for you and more importantly, provide a gateway and foundation to a bright and prosperous future.

May you and your family be healthy, stay safe and enjoy.

Best Regards,

Steven R. Gerbsman
Principal, Gerbsman Partners

Gerbsman Partners
211 Laurel Grove Avenue, Kentfield, CA 94904
Phone: +1.415.456.0628, Fax: +1.415.459.2278
Email: Steve@GerbsmanPartners.com
Web: www.gerbsmanpartners.com
BLOG of Intellectual Capital: www.boic.wordpress.com

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During the dot-com bust, as the online advertising market dried up and the Web companies that had been buying most of the ad space went bankrupt, the people who start and fund companies in Silicon Valley began questioning whether Web sites could survive on advertising alone.

That moment of doubt didn’t last. The ad market revived and free Web services blossomed. But now, as advertising shrinks once again, entrepreneurs and venture capitalists are desperately seeking new sources of revenue.

Does this mean the advertising model is no longer a viable one for new Web start-ups?

Advertising requires an audience, and that takes a few years to build. Web start-ups struggle with the question of whether to sacrifice revenue for several years, build a huge audience and then sell them ads, as YouTube did, or find an alternative revenue stream that will bring in money from Day One.

The venture capitalists that back those start-ups have different philosophies, but as a group they have grown much more cautious about backing companies that have no immediate way to bring in some revenue.

Roger Lee, a general partner at Battery Ventures, said he looks for Web companies with multiple revenue streams. Even if some of a site’s services are free, most of the start-ups in his portfolio also have subscription products, premium services or an e-commerce element.

Read the full article here

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