Silicon Alley gets more street cred

The boisterous crowd, sporting a near-perfect male-female gender breakdown (almost unheard of at a party for a gadget blog), claimed affiliations as widespread as venture capital firms, magazines, Wall Street companies, TV networks, PR agencies and homegrown start-ups. Business cards and drink tickets were passed around freely. The next day, conversations among the local digital media and tech scene--including CNET Networks' New York bureau--buzzed over the fact that as little as a year ago, that sort of party would've been borderline inconceivable.

Each year, the office of New York Mayor Michael Bloomberg designates a week in the fall as "Digital Technology Week," the same week that encompasses Ziff Davis Media's DigitalLife gadget and entertainment expo and a swarm of smaller conferences and parties.

Last year, CNET News.com approached the celebration with the angle that it seemed a bit out of place for a city with such a small technology scene to be hosting a major consumer technology show and highlighting new-media events around town. Finding tech culture in New York in 2006 took a little bit of digging, as traditional mainstays like the advertising and finance industries all but overshadowed it.

Not so much anymore. Since last year's Digital Technology Week, a lot has changed. As Jake Dobkin, publisher of New York news blog Gothamist likes to put it: "Nerds are on the rise. We're taking over."

"New York has stepped up because more and more media (companies) are interested in technology," said Charlie O'Donnell, a former analyst at Union Square Ventures who now is working on an education-centered start-up called Path 101 and spearheads NextNY, a networking group for New Yorkers involved in digital industries of any kind. "It's the same sort of thing around financial services. Any tech firm that's doing anything around financial services is really big in New York."

Big tech companies have been slowly expanding their footprints in the New York real estate market: dot-com conglomerate InterActiveCorp (IAC) opened its futuristic headquarters overlooking the Hudson River in west Chelsea this summer; a few blocks south, Google's Manhattan operations continue to grow in the iconic old Port Authority building; and the neighborhood is apparently going to be home to a massive Apple retail store in near future--it'll be Manhattan's third. Plus, just this month, AOL announced that it will be uprooting its corporate headquarters from Dulles, Va., and replanting it in a former department store just outside the East Village neighborhood.

At the same time, the hip downtown niche of SoHo, best-known for art galleries and designer shopping boutiques, seems to be growing geekier by the day. The neighborhood is now practically saturated with tech start-ups like Blip Networks and Mogulus, as well as new media publishers like Gawker Media, the Huffington Post, Flavorpill Productions, Gothamist, Apartment Therapy, and the recent Discovery Communications purchase TreeHugger.

"Honestly, the neighborhood only has about five restaurants and three gyms and three or four bars," Dobkin said. "It's just swimming with these 10 or 15 (new media) companies, so if you want to go out for lunch and not see somebody, you have to go like, above 14th Street." In Manhattan terms, that's a hike. "It's really hard to keep secrets," Dobkin added with a laugh.

As the New York tech scene grows, so does the press. In July, a cadre of finance and technology veterans launched the Silicon Alley Insider, a blog offering news and analysis about "digital business, live from New York" from start-ups to the interactive initiatives of traditional media companies. And last Friday, TechCrunch founder and Bay Area icon Michael Arrington announced that his new co-editor would be the Brooklyn-based Erick Schonfeld, whom he plucked out of the ashes of the defunct Business 2.0 magazine. To be fair, it does not appear that Schonfeld will be working a specifically geographic beat. But it's telling that TechCrunch, a brand almost synonymous with Silicon Valley's post-bust revival and the Web 2.0 era, will let its newest editor remain on the East Coast.

Meanwhile, New York-based tech reporters are stocking up on energy drinks for this week: Digital Technology Week, coinciding both temporally and thematically with the city's Advertising Week, is going to be a hectic one for the press.

On Monday and Tuesday, the Interactive Advertising Bureau holds its Mixx 2.7 Expo. Plus, on Monday night, sociable geeks will have their pick between a Social Networking Tech Meetup sponsored by Sun Microsystems and an evening of short films sponsored by NewTeeVee, the online video property run by Valley blogger Om Malik's GigaOM. Then, at midnight, the more-than-highly anticipated Halo 3 game for Microsoft's Xbox 360 hits shelves, and a Best Buy store in midtown Manhattan will be the center of launch festivities.

That's just the tip of the Iceberg 2.0. The press will start to flood the cavernous Jacob Javits Convention Center for DigitalLife on Wednesday--the show opens to the public on Thursday--and some will split their time between the Ypulse Tween Mashup and Millennials New York youth-media conferences. (Disclosure: This reporter is moderating a panel at Millennials.)

But when the weekend finally arrives and the high-tech spotlight leaves New York, it's back to business for a technology industry that has grown in leaps and bounds over the past year but is still very much evolving and growing.

"New York, let's be honest, is still a secondary or tertiary technology market," Dobkin said.

Local tech enthusiasts occasionally complain that the lack of a major engineering school in New York puts it at a disadvantage to cities like Boston and San Francisco. But Charlie O'Donnell argued that a lack of available hires isn't the issue.

"The engineer and developer problem is not so much that there aren't enough; it's that the kind of risk profile and career trajectory of the people that are here and capable of it are sort of different" than in Silicon Valley, he said. "If you're a developer here in New York you always have the option to make nice current comp and benefits at Goldman Sachs or some other big company. In the Valley, more of the people in your surrounding network have worked for start-ups, you've seen it go up and down, and you've seen that it turned out OK."

Dobkin agreed that the "developer shortage" problem is a myth, but added that the high cost of quality ad sales departments does make it difficult to be a new-media business in New York. "Most of the companies here are doing ad-supported media models where we're selling advertisements and doing all the things that media companies do," he explained. "To do that, you really need qualified sales people, people who really know the industry and know how to sell the product. For those, we're competing with much larger companies."

But perhaps being a subculture of New York's already-established industries isn't such a bad thing. For one, it's made for a close-knit gaggle of Gotham geeks.

"It's still a very small and intimate industry," Dobkin said. "It's great socially because you make friends and it's a small group of people so you tend to be able to meet everyone. It's great business-wise, because if you're building a company like I am, you're working with the same contacts over and over again. You see them out at bars. It's good for business."