2006 Tech Year in Review

The year 2006 began with Microsoft playing second fiddle to Google but promising big things in the not-too-distant future.

The year finished up much the same way, with Microsoft--again under pressure from Google, but still making big promises about breakthrough products over the horizon. In between, the past 12 months added up to a transitional year for the computer business as new technologies and new business models further scrambled the industry constellation of forces.

While Microsoft struggled to ship its already much-delayed Windows Vista operating system, the spotlight turned to the scores of new consumer Internet companies loosely grouped under the Web 2.0 banner. While Google tended to garner most of the attention, these no-name start-ups accounted for the biggest burst of Internet entrepreneurship since the heyday of the dot-com bubble era.

The increasing shift toward Internet-centric technologies also played out in Microsoft's reorganization in the wake of Bill Gates' announcement that he would slowly step out of day-to-day decision making over the next two years. Even as Microsoft continues to generate the bulk of its revenue the old-fashioned way, the company took steps to deliver more of its software as part of a stream of Internet services.

Silicon Valley also had its eye on the search for alternative energy supplies. As the cost of a barrel of crude oil touched record highs by mid-year, a political and business consensus grew up around the idea that the status quo is untenable. So it was that the venture capital community began sinking even more money into start-ups exploring ways of generating energy from non-fossil fuel sources. No breakthroughs were reported, but there also was no shortage of ideas. Maybe 2007 will be the breakout year everyone is waiting for.

In the meantime, 2006 was also the year of a bizarre high-tech whodunit as Hewlett-Packard became embroiled in a corporate spy scandal. An internal investigation designed to ferret out the source of a boardroom leak to the media ultimately forced the resignation of several top executives--including its chairman--and the filing of criminal charges by the California state attorney general.

As the year drew to a close, the game community had ample cause for excitement as it could now choose among next-generation consoles from Microsoft, Sony and Nintendo. This was much more than a competition for bragging rights. With huge investments at stake, the pressure to win this competition became ever more intense.

--Charles Cooper