Nevadans try creating ‘Silicon Oasis’ in Las Vegas

Monday, March 6, 2000 | 11:09 a.m.

Gaming still dominates Las Vegas economy

Dot-com companies represent just a tiny portion of the Las Vegas economy.

Mike Clarke, an economist with the Nevada Department of Employment, Training and Rehabilitation's research and analysis bureau, said it's difficult to pinpoint exactly how many high-tech jobs exist in Nevada because they're spread over several industry sectors.

Clarke said a 1999 report showed that about 3.3 percent of Las Vegas' jobs are in manufacturing, with only a fraction of that in high-tech sectors.

By comparison, the service industries sector represents about 45.1 percent of the city's jobs, with 26.1 percent of the total specifically in hotels, gaming and recreation.

The number of gaming jobs grew 7.5 percent in Las Vegas from December 1998 to December 1999.

A flurry of recent Internet business start-ups and success stories in Las Vegas is spurring the Nevada Development Authority to look for more.

Somer Hollingsworth, president and chief executive officer of the NDA, said he wants to develop a "Silicon Oasis" in Southern Nevada and is trolling for prospects in California.

"California is a great incubator for these kinds of businesses," Hollingsworth said of the hundreds of dot-com start-up companies that have started as ideas built in garages and turned into lucrative e-commerce.

Hollingsworth was a speaker at the opening of Preference Technologies Inc., a Las Vegas company that is expanding from a website providing financial information as StockUp.com to a multifaceted Internet information provider.

Hollingsworth, Lt. Gov. Lorraine Hunt, Las Vegas Chamber of Commerce Board Chairman Bob Forbuss and Las Vegas Mayor Oscar Goodman were among the dignitaries present when Preference Technologies founder Michael Calderone explained his company's transition to a company focused on building Internet traffic for its clients and partners.

The four leaders were universally impressed with the operation spread over three floors in a nine-story building at 333 N. Rancho Drive. Started by Calderone and Kerry Nicponski in 1998, the business has grown from a one-office operation with six employees 15 months ago to a company with 140 employees and 500,000 subscribers today.

Hollingsworth said the bid to attract dot-com businesses is part of NDA's mission to diversify the state's economy.

Hunt has no misgivings about the state attempting to lure business out of California.

"If they want to steal our gaming, we'll steal their business," Hunt said, referring to the expansion of Indian gaming in California.

When Hollingsworth makes contact with companies, he pitches the state's tax structure, Las Vegas' telecommunications infrastructure, the city's airport and "the psyche of a can-do attitude for business."

He said his staff began a program about 10 weeks ago of calling businesses and pitching Nevada as a location for relocating or establishing branch offices. Some leads were established by scanning Los Angeles news publications. Others were offered by Las Vegas companies with suppliers or vendors in California that they'd like to see in town.

"We try to appeal to them on the cost of doing business in California," Hollingsworth said. "We talk about our low taxes and we talk about the high cost of living, especially in some of the places around the (San Francisco) Bay Area. We tell them how in Las Vegas, you can live 10 minutes from the office."

"We know we're not going to get Hewlett-Packard or Microsoft to relocate here," the NDA's Hollingsworth said, "but it's possible companies like that would be interested in setting up an office here if they knew what kinds of businesses we already have."

Tom Breitling, one of the founders of Travelscape.com Inc., an Internet travel company based in Las Vegas, said in order to lure more dot-com companies to the city, there has to be better educational programs in place to match the other amenities Hollingsworth described.

A spokesman for PurchasePro.com, an online procurement company, concurs.

"The best thing the state can do to bring other dot-coms to Nevada is to encourage educational facilities stressing technologies to bring our work force skill level up to the level of Silicon Valley," said Tony Timmons, public and investor relations marketing manager.

Hal Berghel, chairman of the Department of Computer Science at UNLV, said the department has about 500 undergraduate students today and it is increasing at a rate of about 15 to 20 percent per year.

Michael Marriott, executive vice president of IT Strategies International Corp., a Las Vegas-based technology consulting firm, said the NDA may want to look to the Midwest as well as California for dot-com companies -- because quality-of-life issues are more important to young entrepreneurs.

Factors like a low cost of living, good weather and having a place like Red Rock Canyon so close to home are as important as the work, he said.

Marriott, who said large corporations are starting to move ahead in their information technology efforts after slowing down during Y2K fears, said the NDA should also de-emphasize the impact of gaming on local residents' lives.

"Whenever I talk to companies about the prospect of moving here, I tell them what we all know to be true -- that we only go down to the Strip when we have relatives in town," he said.

LeAnna Sidhu, president of YouTicket.com in Las Vegas, said it's a bigger challenge recruiting dot-com companies because they can set up anywhere and they communicate so easily with vendors and suppliers via the Internet.

There are several dot-com companies that have set up shop in Las Vegas. A sampling:

Preference Technologies

The company started out as StockUp.com, a website with information about stocks and investing. Today, it is using a software product it calls the Global Information Gateway (GIG) to deliver real-time information on multiple channels featuring business, sports and entertainment.

The GIG channel on business is on line with sports and health channels in development.

Calderone said the GIG software is delivered by clients who have some of their own promotions and advertising messages embedded in the software. The software enables the user to receive customized information from a variety of content providers.

PurchasePro.com Inc.

The publicly traded online procurement company is considered one of Las Vegas' dot-com success stories. Founded by Charles "Junior" Johnson in 1996 as a company that facilitated commerce between the gaming industry and its suppliers, PurchasePro has mushroomed into a procurement company for a variety of industries.

PurchasePro, which now has 450 employees, provides business-to-business electronic commerce services to link companies and vendors via the Internet.

The company's success has built on the development of marketing relationships with key vendors, including Sprint Corp., Office Depot Inc. and the American Association of Franchisees and Dealers.

PurchasePro recently added the Memphis Area Chamber of Commerce to its client list and also works with the Greater Phoenix Chamber of Commerce. The company is based at 3291 N. Buffalo Drive and has a smaller presence in 16 markets.

Travelscape.com Inc.

Another high-profile dot-com company, Travelscape was in the news in January for being sold for $95 million in stock to Expedia Inc., the Bellvue, Wash., Internet travel company spun off last year by Microsoft Corp.

The company will retain its brand name and Las Vegas presence and Breitling said the company is expected to expand from its current 220 employees.

Travelscape.com Inc. was founded in 1998 by Breitling and Tim Poster.

The company makes money by buying rooms at bulk, discounted rates and reselling them from call centers and via the Internet. Most online reservation companies take commissions on room sales or referrals directly to the property. Currently, the company has contracts with more than 1,200 hotels in 240 cities worldwide.

The company's new relationship with Expedia will allow it to do more packaging and tie in with Expedia's established airline reservation system.

Lowestfare.com

Another Internet travel company based in Las Vegas, Lowestfare formerly was known as Global Discount Travel Services LLC.

Owned by travel and tourism entrepreneur Carl Icahn, the company thrives on agreements with more than 800 travel agents, airlines, resort companies, car rental agencies and cruise lines, earning commissions from companies like America West, Northwest and Virgin Atlantic Airlines, Hertz Rent-a-Car and Carnival Cruise Lines.

The company also signed a one-year agreement in October with TheStreet.com Inc., a financial services company that selected Lowestfare to operate its online travel service.

Lowestfare has 530 Las Vegas employees.

HelloNetwork.com Inc.

The company launched a website in December unveiling new technology that plays streaming video content without special downloads or plug-ins. That means a customer can produce videos or appear live and send the content over the Internet where it could be viewed by computer users who may not have sophisticated equipment. In essense, anyone could become a worldwide television broadcaster with the technology.

Amy Black-Ellins, vice president of public relations and advertising for the company, said streaming video technology has several applications. On the retail end, a company could demonstrate a product to a global audience. Educators could present lectures, complete with visual aids, to anyone logged onto the site. Entertainers can give concerts and have chat sessions with fans.

The product also has a video-mail application, so two people equipped with video cameras could see each other while they communicate over the Internet.

Ellins, whose husband, Craig, is the chief executive officer of the company, said HelloNetwork.com now has 63 employees and has expanded into a third building at an office complex at 3035 E. Patrick Lane. The company is expected to hire another 20 employees within months.

"Initially, we didn't think Las Vegas (as a headquarters) was a very good idea," said Doug Griffiths, chief technology officer for HelloNetwork.com. "But we liked the small-town approach and the cost of living here is much better than in most high-tech locations.

"We feel the technology is what brings them (employees) in, but it's the community that keeps them here."

Among the company's more than 1,000 clients are the California Highway Patrol, which offers instructional videos to its officers, and entertainer Joe Walsh, who recently performed and had a fan chat session on the Internet using the HelloNetwork technology.

SimpleSearch.com Inc.

Founded a year ago, the company's website went live June 1, said J.L. Jordan, director of corporate marketing services.

The site operates a search engine designed specifically for "newbies" -- people who have limited experience or are brand new to using the World Wide Web. The site includes a step-by-step tutorial program explaining how to use the Internet.

The company generates cash flow with banner ad sales and by selling the ranking order of companies that are listed in searches.

SimpleSearch.com has about 60 employees, including Chief Executive Officer Kirk Arbogast, and will move in April to a 15,000-square-foot office at Rancho Drive and Gowan Road from the company's current headquarters at 8240 W. Charleston Blvd.

24-7Delivery.com

Mitch Kove, chief executive officer of the company, considers it to be a unique hybrid of the convenience of online ordering with immediate delivery.

The site offers users a virtual shopping cart for more than 2,000 products. Once a user places an order, the company will deliver it within an hour for $4.99. For orders of more than $50, the delivery fee is waived.

In addition to a variety of groceries, 24-7Delivery.com makes and delivers sandwiches, salads, pastas and breakfast items.

Kove's flagship store at 8504 Del Webb Blvd. serves the northwest valley. He said the company plans to expand with five more stores in the Las Vegas area by the end of the year with plans to franchise the concept to other cities nationwide in the future. To finance further expansion, Kove is considering a public stock offering by the end of 2001.

Kove, who developed Quark's Bar and Grill at Star Trek-The Experience at the Las Vegas Hilton and opened Planet Hollywood and the Official All-Star Cafe, said the online-grocery delivery concept is something he has been contemplating for years. Today, the company gets about 30 orders a day averaging $35 an order.

The company has 14 employees and makes money from banner and vendor advertising. Kove also plans to have licensing fees and royalties as profit centers.

AllMeetings.com

The company operates a website with software to exploit a niche market -- the planning of small meetings and conferences.

Megan Tobin-Jones, vice president of marketing for the Henderson-based company, said the software analyzes meeting costs, transportation, lodging, meals and other expense factors for meetings of up to 500 people, ranking leading hosts from a 5,000-property database within 10 seconds.

Tobin-Jones said the site can save up to 50 percent in expenses and 75 percent of a meeting planner's time by using it.

The company was founded in 1997 by Glenn Bingham, who used computers to coordinate meetings when he was a government worker. The site was launched last May and redesigned in October.

Today, the company has nearly 50 employees.

BestOf-America.com

The two-year-old company, operated by Sandra Rennert, a former Mrs. Nevada, acquired the "BestOf" domain name in 600 cities, 50 states and 43 countries and will use online polling to capitalize on a popular concept.

The marketing company uses a promotion popular in newspapers all over the country -- developing lists of people's favorite things in their communities. To kick off the concept, Rennert has a team of Nevadans choosing the best of Las Vegas, awarding plaques to, for example, the top three buffet restaurants in the city. The winners: buffets at Paris Las Vegas, the Rio hotel-casino and Bellagio.

In future years, the company will compile on-line voting by site browsers and make annual changes.

Rennert and co-worker Kelli Douglas, the reigning Mrs. Nevada, are using pageant contacts to develop expert committees to develop the concept in other cities and states.

The company generates revenue by selling advertising to "best of" winners and companies that feel they stack up with the best. Rennert said there is no financial obligation to the winning companies.

The company is based in Las Vegas and has about 25 employees.

YouTicket.com Inc.

The company's website runs an online ticketing company, offering consumers a single location to buy Las Vegas show tickets, hotel rooms, Grand Canyon and city shopping tours and, soon, car rentals.

Sidhu said the company also operates as an online concierge service on shows that aren't sold directly from the site.

The company, which has seven employees and began operations from 4420 S. Arville St. about a year ago, is in the process of redesigning the site to better track traffic to it.

LasVegas JobSearch.com

The tiny company, which began operations last year, links job-seekers with companies in search of employees. Troy Aguon and three other employees maintain the site, which now has a "community partner" in KVBC Channel 3, which sponsors the site.

Aguon has worked with several companies to post job openings accessible worldwide by people planning to move to Las Vegas. The site recently began posting jobs from Sunrise Hospital and Medical Center and the soon-to-open Aladdin hotel-casino.

Several other companies -- most of them media outlets -- also have their own dot-com sites and businesses.

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