Tonight we're gonna party like it's--2004

Tech companies splurge on holiday celebrations again. Hot this year in Silicon Valley: chocolate fondue fountains, hula dancers.

Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
Alorie Gilbert
4 min read
You know business has been good when chocolate fondue fountains are in demand.

Those and other lavish treats are appearing at more high-tech company holiday parties this year, as many firms splurge after several years of smaller, low-key functions. Although few are reviving the extravagant blowouts of the late '90s, this year's festivities signal that Silicon Valley is in the mood to celebrate again.

"Company holiday parties are definitely coming back," said Tony White, vice president of the Silicon Valley chapter of the National Association of Catering Executives and director of catering at the Cypress Hotel in Cupertino, Calif.

"People are doing more elaborate things," White said. "Decor is being upgraded from last year, and people are doing more elaborate desserts."

Fondue fountains, which feature multiple tiers of warm cascading chocolate, are a big hit at the hotel this year. The Cypress, which rents its ballroom for as much $12,000 a night, is hosting holiday bashes for several high-tech companies, including software maker PalmSource, semiconductor firm PLX Technology and game developer Capcom.

Other hot tickets in Silicon Valley this month were parties thrown by Cisco Systems, Google and Yahoo. Both Google and Yahoo went with island themes, which works well in laid-back California, where flip-flops are often the footwear of choice among software engineers.

Entertainment at the Google fete, held at the Computer History Museum in Mountain View, included a mechanical surf board, a hula dance troupe, tribal conga lines and a karaoke stage. Googlers and their guests were also offered grass skirts, tiki beads, henna tattoos and bindi facial jewelry as they grazed on buffets of sushi and Polynesian food.

At Yahoo's Treasure Island-theme party, held the following night at the Concourse Pavilion in San Francisco, partygoers were offered eye patches and other pirate accessories. They were also treated to casino games, sushi and performances by several local bands. But The Flaming Lips, the hip rock band that played at last year's party, did not return.

Yahoo spokeswoman Nicki Dugan wasn't aware that Google also had an island-theme holiday party. The companies, rivals in the Web search market, weren't in this case trying to outdo each other, she said.

"It's just a way to thank everyone for their hard work," Dugan said.

Cisco celebrated its 20th anniversary this month by indulging its employees in a private Carlos Santana concert at the San Jose

Arena. Though not technically a holiday event, the concert was nonetheless a generous gift.

The company paid $650,000 to book the rock legend, according to Web logger Robert Scoble. Cisco spokeswoman Abbey Smith would not discuss how much the company spent but said the expense was justified.

"We wanted to recognize and thank our employees," she said. "They have not received raises for the last four years."

These elaborate functions aren't exactly the norm in Silicon Valley--or anywhere else in the country. Almost one in four companies cut their holiday party budgets this year, and 64 percent planned to spend the same amount as last year, according to a survey of 100 human resources executives conducted by employment services company Challenger, Gray & Christmas.

While 70 percent of the firms surveyed were planning parties, most of them--63 percent--don't let employees bring dates. Companies are also keeping costs in check by hosting parties at the office and opting for lunch or appetizers rather than dinner, said John Challenger, CEO of the staffing firm.

But in Silicon Valley, a big holiday bash remains something of a status symbol.

"In the tech industry, there's more of a tradition of putting on some real wingdings," Challenger said.

Many in the industry have good reason to let the champagne corks fly. Initial public offerings made a comeback this year, led by Google's barn burner of an IPO in August. 2004 has also seen a revival in online advertising, which fuels so many Web businesses, and electronic gadgets are on most everyone's wish list this season. In addition, the economy and the job market are showing modest signs of improvement.

"It's the economy," said software executive Ammiel Kamon, whose firm, DiCarta, is planning a casino night at a Marriott hotel. "It's not just because we want to spend money. The company has grown--double, double, double."

Even start-ups that have yet to see profits are feeling the urge to splurge this year, fueled perhaps by the hope that an IPO may not be so far off. Plaxo, a venture-backed Internet company that specializes in social networking, took 30 employees and their guests to dinner at Zibibbo, an upscale restaurant in Palo Alto. Two years ago, with just a handful of employees, it was pizza and soda.

"We're really cheap bastards," said Rikk Carey, Plaxo's executive vice president of engineering and operations. "We don't do a whole lot the rest of the year; we just work our butts off. This was a reward for getting our stuff done."