The Web: Hello to the second 'dot-com' era

By GENE J. KOPROWSKI, UPI Technology News   |   Dec. 8, 2004 at 3:19 PM
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CHICAGO, Dec. 8 (UPI) -- During the late 1990s, an area called Silicon Alley emerged in New York City as an East Coast alternative to California's Silicon Valley.

More recently, the Silicon Prairie emerged in Iowa as home to many Internet start-ups.

As the World Wide Web continues to mature as a medium, other cities are desperately vying for dot-com businesses, offering economic incentives, building out fiber-optic infrastructure and high-speed digital subscriber lines, even in rural regions, far from metro areas, hoping to capture some of the job growth of the now-recovered industry.

Sometimes, expert observers told UPI's The Web, the economic development plans, designed to attract Web companies, are quite imaginative themselves and are based on once-quixotic government projects that have emerged as prescient.

"Loudon County, Virginia, in 1960, was nothing but cornfields, but they built Dulles Airport there," Sen. Peter Fitzgerald, R-Ill., told business leaders at the City Club of Chicago last week. "Over time, businesses congregated to the new hub. Now it is a mini-Silicon Valley. AOL was founded there. If we built an airport in the south suburbs of Chicago, I am sure we can all agree that the south suburbs would be like Northern Virginia."

Fitzgerald is retiring from the U.S. Senate next month.

Rural areas are competing particularly hard to attract Internet companies. Ulster County, N.Y., for example, is most famous for hosting the Woodstock music festival, but visiting hippies -- so-called cultural tourists -- are not enough to foster economic development.

So, Chester Straub, president of the non-profit Ulster County Development Corp., is providing assistance to small companies that want to locate there. Unlike traditional economic development efforts, the county has adopted an innovative angle: It provides loans for telecommunications development in the towns there.

"The telecommunications loan fund is intended to provide low-cost loan money to businesses to utilize advanced telecommunications capabilities," Straub told The Web. "That is allowing companies to rewire buildings for e-commerce based businesses with fiber optics. It is also helping with software and hardware acquisition, needed to build the businesses."

The UCDC is working with an array of technology infrastructure providers to make the county a hub for Internet "cultural entrepreneurs," Straub said. This includes companies such as Verizon, Time-Warner and the Hudson Valley Data Network, "all of which over the last two or three years have extensively expanded their networks here," he added.

In the long term, the developers hope to transform Woodstock and its environs into an Internet business and arts entrepreneurial community.

"This will not just be a retreat," Straub said, "this will be a place to do business. Artists and developers will have a foot in both New York City and here."

Companies that have emerged in the community, about 90 miles north of New York City, have included Active Learning Technologies Inc., an online educational products developer; CSIG Inc., a software developer for exporters; Harte-Hanks Interactive, a unit of Harte-Hanks, the media company, and, reportedly the largest and most profitable online mortgage broker in the United States.

Research Triangle Park, N.C., is now embracing networking and internetworking as the future of its economic growth as well. The area's non-profit development entity, Research Triangle Regional Partnership, recently commissioned a study that found health informatics -- Internet-based health data -- could be a potential boon for the region, given its vast population of skilled white collar workers. Local developers are working to facilitate that, said Charles Hayes, RTRP's president and chief executive officer.

"We are spending a lot of resources to make sure that we are competitive in the global arena in knowledge economies," Hayes told the Web.

Hayes said networking technology jobs have burgeoned there in recent years. Cisco Systems Inc., the Silicon Valley router and networking technology developer, employs some 3,000 people in the Research Triangle Park area.

"And 1,000 of those are engineers doing R&D for routing and switching," he said. "Cisco has every aspect of their business here that they have in their headquarters in Silicon Valley. They started here in 1995 with 225 people, so there has been significant growth."

IBM also has a huge presence in Research Triangle Park, with 13,000 employees, Hayes said. At nearby North Carolina State University in Durham, networking firms Alltel and Nortel as well as Cisco have developed a center for advanced communications.

"We have just gone through a fairly sophisticated project over the last year, looking at areas of opportunity for our region," Hayes said, "and we can lead in the world economy in pervasive computing, informatics and analytical information. Those areas overlap and intersect. We're trying to build a real knowledge economy."

Technologists in North Carolina also recently completed a Voice over Internet Protocol -- online telephone service -- interoperability project for the Department of Defense.

Salt Lake City, Utah, is another hot area for dot-com resurgence. Many Californians fled there after the meltdown in the late '90s. They provide a base of talent that, along with low taxes and a high-quality of life, is attracting attention from a lot of firms.

"We were able to survive the dot-com implosion and we survived (the terrorist attacks on )Sept. 11, which was harder than we thought it would be," David Hall, president and CEO of My ePhit, an online health information provider in Salt Lake City, told The Web.

Many local areas have benefited from opportunities provided by major Internet firms, such as eBay, which is fostering micro-businesses across the United States.

Experts at Aplus.Net, a Web-hosting firm in San Diego, told The Web that small- to medium-sized Internet business is the biggest area of online development right now and is expected to have no slowdown next year.

"There is somewhat of a second dot-com era happening, only a much more proven and conservative one," Ivan Vachovsky, president and CEO of Aplus.Net, told The Web.

Some of the most conservative entrepreneurs actually are using e-Bay as their entire means of operation, thereby cutting down on IT costs dramatically and focusing on sales and customer service.

Dean Jutilla, a spokesman for eBay Inc. in Silicon Valley, more than 430,000 individuals around the country have started small businesses and are making either a part-time living or a full-time career, selling services online.

"No time is more prevalent than right now, when these mom and pop sellers go about the holiday shopping season by adopting some of the tools and tactics used by national online retailers and brand-name companies," Jutilla told The Web. "These small businesses -- mostly individuals and families -- are using the Internet to make a living. In some cases, mom is the CEO. Dad heads up shipping and inventory control, while the son and daughter are customer service reps."


The Web is a weekly series by UPI covering the technological, cultural and social impact of the World Wide Web, by Gene Koprowski, who covers technology for UPI Science News. E-mail

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