It gives a broad overview of the 150 largest of roughly 385 companies and looks back at last year's performance, not this year's expectations. As such, it accurately shows where Silicon Valley has been and offers a treasure trove of data about the most established locally based companies. But because of its emphasis on sales, the list barely hints at where the region is going. The combined stocks appreciated by 985 percent, meaning the market value of the six Internet companies in the 150 has grown nearly ninefold in a year. This is a clear comment from Wall Street that although the nascent Internet sector accounted for a negligible piece of the revenue pie in 1998, it is where investors expect the most growth going forward.
Silicon Valley is in transition.
Past bellwether industries like disk drives and semiconductor-equipment manufacturing suffered through a horrible year. The Asian economic crisis was partly to blame. But eroding prices have turned many cutting-edge products into commodities and have dulled the allure and growth prospects of many established companies. Also, Intel's wildly successful bet on microprocessors for PCs has widened its already big lead over the rest of the chip segment. Sales are only one barometer of a company's health, and not always the best one.