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Cyber Bucks—Intel continues to expand locally



WebSideStory Bucks Dot-Com Trend, Secures $7.5M in Venture Capital

Intel Corp., which already has a sizable presence of about 480 employees working here at three leased facilities, made plans to consolidate and possibly expand its presence when it acquired 31 acres of land in Scripps Ranch last month.

“We purchased the land for a possible site for an Intel campus,” said Intel spokesman Chuck Mulloy at its Santa Clara headquarters. “It’s an investment we feel is prudent at this point as we prepare for the future growth of some of our operations.”

Mulloy said Intel has no specific plans yet nor any construction date, nor what the company paid for the land across from Scripps Ranch High School.

Kevin Carroll, executive director for the AeA, formerly called the American Electronics Association, said although Intel keeps its plans close to its vest, the parcel can accommodate some 1 million square feet of office space , sufficient to handle several thousand employees.

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“This portends good things for San Diego because when many larger companies from Silicon Valley expand they are doing it at other locations. And San Diego is a prime place for that to happen, both because of its lower wage scale and the lower cost of housing compared to the prices paid in the Bay area,” Carroll said.

Currently, Intel has three operations in San Diego: networking and communications products; a wireless research and development operation; and one centered on logic chip sets.

The units are the result of company acquisitions over the past 18 months, the largest being that of IPivot, an Internet technology firm that was purchased for about $500 million.

Other purchases include part of DSP Communications, a Cupertino-based firm now part of Intel’s cellular communications division; eWave, a firm concentrating on the development of Bluetooth wireless technology, now part of Intel’s new business group; and XLNT, involved in the development of high density gigabit ethernet switching technology, now a part of the communications products division.

Intel also has some employees working on a joint venture with Symbol Technologies, which is involved with wireless local area networks.

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WebSideStory Gets Infusion: Not all dot-coms are pariahs, as evidenced by WebSideStory.com attracting $7.5 million from TA Associates and Summit Partners, two Silicon Valley VC firms.

The local firm, which provides real-time Web traffic analysis for Internet companies, said its Enterprise customer base, or those that generate the highest amount of Web traffic, grew by 700 percent last year, a figure a spokeswoman said amounts to “several hundred customers.” Among these are such well known names as Cisco Systems, Akamai, Sun Microsystems, Hewlett-Packard, and ESPN.

The company also said it nearly doubled its work force over the year to 160 persons, and became the anchor tenant of a six-story office building in Sorrento Valley, taking over 60,000 square feet.

Zucotto Wireless Attracts Cash: San Diego-based Zucotto Wireless, which produces specialized processors for wireless connections, said it has secured $35 million in a second round of financing led by Shelter Capital Partners and Baker Capital Corp. Other VC investors include Brightspark Ventures, MM Venture Partners and Royal Bank Capital.

Zucotto said it plans to use the money to complete the development of its Xpresso Java native processors and speed up their introduction to the market.

The company previously obtained $10 million in an earlier round of financing from private and VC investors.

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SAIC Shows Huge Profit: Science Applications International Corp., the locally based high-tech research and engineering firm, reported it earned $2.8 billion for its nine months ended Oct. 31 on revenues of $4.3 billion, compared to a net gain of $579 million on revenues of $3.9 billion.

For the third quarter, SAIC said it earned $144.7 million on sales of $1.5 billion, compared to earnings of $67.5 million on revenues of $1.4 billion.

A big chunk of SAIC’s profits, about $1.5 billion, were generated by the sale of its shares in its Network Solutions subsidiary to VeriSign. It also included profits on the sale of other equity investments, higher interest income and a reduction in its operating income, the company said.

SAIC has won several large contracts in the past quarter, including those related to ongoing work for the Navy’s Space and Naval Warfare Systems Command (Spawar); the Navy’s Area Air Defense Commander Capability Program; and the Social Security Administration.

After the quarter ended, it also won a joint $3.1 billion contract with Bechtel National for work on a U.S. Department of Energy management program for radioactive waste at Yucca Mountain in Nevada.

SAIC has 41,754 employees, an increase of about 500 from the prior quarter, including some 4,500 in San Diego.

TeraGlobal Cuts Staff: San Diego-based TeraGlobal Communications Corp., whose technology integrates voice, video and data, laid off 40 people, or about 60 percent of its staff, including 22 people in its local headquarters office, as part of a corporate restructuring necessitated by its inability to secure additional financing.

“This restructuring brings our expenses more in line with anticipated near-term revenues,” said Paul Cox, TeraGlobal’s president.

In addition to the local cuts, the company also reduced its staff in Logan, Utah, by 14, and by four in other remote offices. After the cuts, the company has 35 full-time employees, including 23 in San Diego.

The company said it wants to concentrate on sales of its product line and has doubled its sales staff from four to eight people.

TeraGlobal, which was founded in 1998 and had raised about $27.5 million, is also seeking between $1 million to $2 million in bridge financing, said James Mercer, executive vice president.

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LightPointe Secures $6.5 Million: LightPointe Communications, a San Diego designer and maker of components used in optical networks, said it secured $6.5 million in debt financing from Silicon Valley Bank and GATX Ventures Inc. The funds will be used for working capital and equipment for the company’s expansion efforts in this country and in Europe, Asia, and Latin America.

LightPointe obtained $12 million in VC funding in September and recently moved to new offices.

Anacomp Losses Escalate: Poway-based Anacomp Inc., the document management firm, reported a net loss for its fiscal year ended Sept. 30 of $111.4 million on revenues of $383 million, compared with a net loss of $67.9 million on revenues of $442 million for the previous fiscal year.

Anacomp, which failed last year to find a buyer, attributed the losses to reduced revenues from three of the company’s units, including nearly $41 million less for its Datagraphix division. The company decided to discontinue the manufacturing unit in June and retain its three other units: Document Solutions, Technical Service and docHarbor.

Anacomp’s financial woes haven’t been resolved. It continues to be in default on its bond payments, in violations of earlier credit agreements and is in the process of restructuring its debt.

All this is putting an strain on the company’s stock, which was trading on the over-the-counter exchange at 8 cents as of Jan. 8. Its 52-week range was between $19.18 and a nickel.

Send tech-related finance items to mallen @sdbj.com.

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