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To: ftth who wrote (323)	11/11/1999 10:45:00 PM
From: ftth	Respond to of 1782

Photon Valley. Forbes, Nov 15, 1999 p59 forbes.com Hardy, Quentin IT'S OFFICIAL: LIGHT IS HOTTER than the Internet. The Oct. 22 initial public offering of Sycamore Networks, an optical networking company, clinched it. The stock opened up 613% and closed up a mere 386% on the first day of trading, the fourth-biggest one-day gain for a new offering. Switching at the speed of light took Sycamore from $40 million in startup funding to a $21 billion valuation at the market's opening bell. When money floods in, it's a good time to start new optics companies. One venture capitalist joined a $32 million funding round for Cyras Systems after a two-hour meeting. Just one problem: Precious few engineers can bend 40-gigabit beams of light around corners. Most of the photon brains are locked up inside the leaders, Lucent Technologies and Canada's Nortel Networks, and a couple of research institutes. So the new outfits are ripping into the old, particularly the old Canadian. A week before Sycamore went public, Optical Networks of San Jose flew a senior Nortel manager from the middle of his vacation in Greece, first class, to California. The prospect met the Midas-like venture capitalists of Kleiner Perkins, Optical's backers. His wife saw four houses Optical had picked out for them, with details on each school district. He signed. "There is no one in the Valley who knows how to do optical transport," says Optical's chief executive, Hugh Martin. "We have to import all of our guys." He has so many Canadians that Kleiner paid for an Optical Networks hockey team. Martin is merely trying to keep up with his rivals, who hire optics talent as if they're wooing defectors. E-Tek Dynamics raids Chinese universities, putting newcomers in "halfway houses" where seasoned countrymen teach them how to drive, use a microwave and pay rent. Nortel is probably bearing the brunt of the raids because the Canadian company has a less attractive stock options package than Lucent. Stephen Pearse, Cyras' chief executive, is a former Nortel executive who freely raids his old employer. In one week in January Optical's Martin nabbed ten Nortel engineers. Don't expect optics mania to end. Networking speeds--gigabits per second--go up exponentially, just the way computing power goes up exponentially under Moore's Law. But with optics the speeds are doubling twice as fast. Fast light, fast money. Copyright Forbes Inc. 1999