Top Five Predictions For ...


I write a column on Silicon Valley for a tech publication in Korea called The Electronics Times.

The editor asked me to take a shot at predicting what will happen in Silicon Valley in 2011.

Here’s what got edited out of the column (apparently storytelling techniques with a touch of levity don’t resonate overseas):

The Cupcake Bubble Hits the Fan

The rubble from the dot-com bubble is still etched in our minds.

More recently, the subprime mortgage fiasco wreaked havoc in Silicon Valley and across the U.S.

Next year, we will witness the bursting of the cupcake bubble.

That’s right.

The proliferation of cupcakes simply isn’t sustainable.

With thanks to my crack research team, check out the following back-of-the-envelope chart: 

cupcake market

Sure, the number of target buyers has bounced back to 2007 levels, but supply has gone berserk.

Assuming 10 percent of the target buyers like cupcakes enough to pay for premium – no sure bet – they’re going to need to average roughly 1.5 cupcakes per working day to consume capacity.

Unless the cupcake makers can somehow tap into more of a mainstream audience, there’s no way affluent Silicon Valley buyers can support so many merchants in a niche space.

Spat Between HP and Oracle Escalates

It’s easy to watch the friction between HP and Oracle and call it petty.

No doubt, Larry Ellison took great delight in hiring Mark Hurd after HP gave him the boot. But this battle goes much deeper than the executive personalities.

Oracle wants to be in the hardware business. By acquiring Sun, Oracle entered one of the few hardware segments that still produces decent profit margins: storage systems.

HP wants to be in the software business. They’ve always coveted IBM profits derived from software and how software feeds another high-margin business, consulting services.

If I was Larry, I would regularly sweep the humble abode – including the koi pond – for listening devices.

TechCrunch Experiences Seller’s Remorse

If you read the TechCrunch “backstory” you’ll find one “little” item conspicuously absent … the AOL acquisition.

I’m guessing TechCrunch’s branding strategy doesn’t include touting AOL ownership.

I know AOL CEO Tim Armstrong said at the announcement, “We’ll try to be as hands-off as possible.”

But everyone always utters the “hands-off” words after consummating the deal (except BusinessWeek, which knew the iron fist of Bloomberg would soon descend).

It’s only a matter of time before the AOL mahogany-row-ites offer their “suggestions” on how to increase organic traffic.

Warren Buffet Makes Silicon Valley Investment

Mr. Buffet has shunned Silicon Valley because by his own admission he didn’t understand technology.

But after playing enough bridge games with Bill Gates and grasping the difference between ASICs and FPGAs, he’s ready to make the plunge. 

Plus, after investing in Chinese auto and battery company BYD, Silicon Valley companies seem like treasury bonds. 

Woodside High School Offers Blogging Class 

It all started with a blog called “Good Morning Geek” penned by a 12-year-old boy. 

A Woodside High parent gets wind of GMG, e-mails the link to her mahjong posse, and within 48 hours a firestorm ensues. 

How can a kid who’s not even in high school churn out cogent posts on topics ranging from the benefits of Tumblr to coding on Android while our kids think WordPress comes from a winery started by out-of-work journalists? 

That’s how Blogging 101 ends up being added to Woodside High’s English curriculum in 2011. 

If you’ve got your own predictions on Silicon Valley for 2011, jump in. 

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