Tech is down but not out

"All the economic progress Las Vegas made during the last seven or eight years has come apart in the last year and a half," my cab driver said.

On that somber note, I began my visit to the computer industry's annual big convention, Comdex. Although the cabby was talking about his hometown, he might as well have been talking about Comdex and the tech sector.

When I was here two years ago, at the height of the dotcom boom, Comdex vibrated with the energy and the imagination of a time when people thought the business and the economy were on a never-ending upward ride. In 2000, almost 250,000 people attended the trade show. Everybody had a product that would be the next big thing. Exhibitors threw parties that were displays of staggering wealth, and even small distributors had dazzling freebies to give away.

We all know what happened next. In 2001, only 125,000 people attended. Organizers blamed Sept. 11. On Monday, about 60,000 people were here.

The show itself is considerably smaller. This year, there are 1,000 or so exhibitors. Two years ago, there were 2,400. And Key3Media, which runs this show and other tech-industry conventions, is in financial trouble. Last week, it said it may need to file for Chapter 11 bankruptcy in December.

Among attendees was a curious mix of optimism and dread. Almost all of the keynote speeches talked about the need to simplify, to get back to basics. They also reminded the audience that even if times are hard, don't pay attention to the "cynics and doubters," as Hewlett Packard CEO Carly Fiorina called them, and never forget to keep your eyes on the prize.

"Even though we're in an economic downturn, we're in an innovative upturn," Microsoft's Bill Gates said Sunday. "I believe people are dramatically underestimating all the innovation going on in our industry, all of the great products that are on the way, and the positive contribution that technology is making to our economy."

It's a message organizers hope attendees take to heart.