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2011 in review: The changes in Silicon Valley

Tech companies will be vying for control over consumers' television sets next year through cloud computing.

Jeremy Hobson: If I had to pick one bright spot for the U.S. economy in 2011, it'd probably be the one about 350 miles up the California coast from where I am right now, in Silicon Valley. Despite the tough economic headwinds, the tech industry continued to innovate, produce and even add some employees.

Here now to wrap up the year in tech for us is Marketplace's Steve Henn, who joins us from -- where else? -- Silicon Valley. Hi Steve.

Steve Henn: Hey.

Hobson: So let's start by talking about the biggest companies in the tech world, like Apple, HP and Google.

Henn: Yeah. I think the big story for all three of those companies is changes at the top. All three have new CEOs. Obviously, with Steve Jobs passing, Tim Cook is now in charge. And he's going to face lots of challenges. He has to find a new salesperson; I mean, one of the huge assets that Jobs brought to the table was he could build tremendous amount of excitement for Apple products. And he needs to convince the markets and consumers that Apple products will still amaze. But obviously, you know, Apple's not the only company that's going through leadership changes.

Hobson: Right, what about Google? We've got a new CEO there too, where Larry Page took over for Eric Schmidt.

Henn: Larry Page came in earlier this year with a mission: One was to make Google a player in social -- so they launched Google+, that's going pretty well. But the other was really to bring some focus to the entire company, to focus what Google does, make it easier to understand for consumers -- but at the same time, protect that spirit of innovation that allowed it to do things like build a self-driving car.

Hobson: What about HP, Steve? I guess this would probably be considered the dinosaur of Silicon Valley at this point, but another change at the top at Hewlett-Packard.

Henn: Yeah, you know, HP is this iconic company here, but it had a terrible, terrible year. It started 2011 with a relatively new CEO Larry Apotheker. Probably his biggest misstep was in July, he announced that HP -- which is the largest computer-maker in the planet -- wanted to get out of that business. And in weeks, he got fired. So now Meg Whitman -- you know the former CEO of eBay and Republican gubernatorial candidate in California who ran against Jerry Brown last year -- is now in charge. She has a real turnaround battle in front of her. So we'll see how it goes.

Hobson: Well it wasn't just leadership changes in Silicon Valley that were the big story of this year. There were a lot of things happening where you are that are going to affect all of us who use tech devices.

Henn: Yeah. One of the biggest is the cloud. The cloud's been around for a while -- Apple launched iCloud this year; other companies have been selling cloud computing for a while. And 2011 might not have been the year it broke through, but it definitely was the year it became more and more common in people's everyday lives. So the cloud's already had an enormous impact on business, but I think in the next year, you're going to see it try and take over your personal entertainment system.

Hobson: How is that going to happen, Steve? How are we going to interact with the cloud next year?

Henn: If you think about it, services like Netflix -- when it streams movies -- they're really based on cloud computing. You may not own any DVDs, but with Netflix or Amazon Prime or instant streaming, you can access tens of thousands of films instantly online -- watch them on your computer or your tablet or your TV. Those films live in servers you don't own. That's the cloud. And you can share and stream any kind of data that way. Apple, Amazon, Microsoft, Google -- they're all interested in dominating your television set. They want to deliver your shows and your music and your movies into your home. There's a huge advertising and subscription windfall there, sort of the pot of gold at the end of this rainbow. And the fight over who controls that is shaping up to be one of the biggest tech battles in 2012.

Hobson: So maybe we'll have even more remote controls in the living room.

Henn: No, it's all going to be voice-activated.

Hobson: There you go. Marketplace's Steve Henn in Silicon Valley. Steve, thanks so much and happy new year.

Henn: Happy new year to you too.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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