New York (Yes, New York!) is tech city

December 6, 2010: 3:00 AM ET

Watch out, Silicon Valley. Thanks to Google, Foursquare, and others, the Big Apple is fast becoming home to some top Internet talent.

New York's tech cred is on the rise: Manhattan-based Foursquare's geolocation service is the envy of Silicon Valley. Facebook bought out two New York startups, and Google just purchased the huge Chelsea building where it employs nearly a tenth of its global workforce. Now incubators are sprouting downtown, venture capital firms are opening New York offices, and prominent angel investors are spending more time with the scores of developers who crowd into shared workspaces across the city. "New York was 5% of our portfolio just two years ago, and now it is 20% and climbing," says investor Ron Conway, who today spends 10 days each quarter in the city.

Cheerleaders have long tried to position New York as tech city, but the numbers never held up. In 2005, Internet-content companies in New York received $61 million, while Silicon Valley firms raked in $209 million. Fast-forward to 2010: In the first nine months of this year, venture firms invested $138 million in New York companies, while the Valley's Net players received $205 million, down from $554 million a year ago.

Why New York, and why now? More

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