2008 year in review: US tech industry

Corporate mergers and the presidential elections dominated the US tech landscape in 2008

Conflicts over corporate mergers, presidential elections and even the use of old television spectrum dominated US headlines during a rollercoaster year for many in Silicon Valley and throughout the nation.

Microsoft started the year off with a bang, announcing in late January that it was placing a bid for Yahoo. The $44bn offer reflected a per-share price of roughly $33.

After a short deliberation, Yahoo's board of directors rejected the bid, suggesting that the company could create a higher share price on its own. Analysts said that corporate culture also played a part in the decision, as many Yahoo veterans did not wish to adopt Microsoft's more formal style.

As the year progressed, the deal soured. Both companies publically traded barbs before Microsoft finally withdrew its offer in May.

For Yahoo, things went from bad to worse. Shareholder Carl Icahn launched a public rebellion against the directors, threatening to take control of the board and dismiss chief executive Jerry Yang. Eventually, the two sides reached an agreement which gave Icahn a seat on the board.

But the deal came too late for Yang. As an alternative search deal with Google fell through, Yahoo's stock price fell below $12 a share and stockholder confidence plummeted. Yang was forced to resign as chief executive.

Yahoo was not the only company to feel the pinch in 2008. As Autumn descended on Silicon Valley, a tanking economy brought with it a brutal stretch in which tens of thousands lost their jobs.

As the credit market staggered, venture capital dried up and many startups were forced to make major job cuts or close their doors. New funding and IPOs came to a virtual halt over the year.

Larger firms were hit just as hard by the downturn. Companies such as Yahoo, Xerox, AT &T, Circuit City and AMD shed tens of thousands of jobs between them in October and November.

However, November's presidential election brought renewed optimism for the development of an internet-savvy federal government.

Democratic candidate and president-elect Barack Obama used the internet as no candidate had ever done before. The campaign set up and carefully managed web sites to co-ordinate events and push for debates on YouTube.

Obama himself also proved highly tech-savvy, constantly sending and receiving messages on his BlackBerry, and announcing his choice of vice president by text message.

Following the election, Obama moved to appoint a national chief technology officer, and opened up his transition web site under a Creative Commons licence.

Among the issues which await the Obama administration is the delegation of the wireless spectrum. The Federal Communications Commission spent much of the year debating whether to open the soon-to-be-vacated analogue television broadcast spectrum with a free wireless network that could be accessed by any device.

Through much of the year, the plan was championed by FCC chairman Kevin Martin with the backing of companies such as Google.

Despite opposition from telcos, the plan appeared to be heading forward. In December, however, the initiative hit a roadblock in the form of opposition from outgoing president George W Bush.

Going into 2009, many of the issues will continue. As the debate over the wireless spectrum rages on, many analysts predict that the economic struggle may only worsen before it improves.

With just days before the dawn of a new year, it appears that the big US technology battles of 2008 will echo long into the future.