Tech firms shuffle spaces Tech firms shuffle spaces (July 18, 2003)

PayPal to leave, SGI to contract, Google to expand in town

Candice Shih

With the shakeup of some major commercial real estate in Mountain View, not all the news is bad.

Two of Mountain View's most successful technology companies, PayPal and Google, are expanding and moving to new offices, while SGI continues to shrink.

PayPal, which inhabits offices downtown on Bryant Street, is pulling up its roots and relocating its headquarters to new offices in San Jose at the end of 2003 or beginning of 2004. The reason, said PayPal spokesperson Amanda Pires, is twofold: to accommodate expansion and to foster integration with new parent company eBay, which acquired the online payment company last October.

Despite the slumping economy, both eBay and PayPal are continuing to hire new employees.

"A lot of us are sad to leave Mountain View. We love it here," said Pires. PayPal has 200-300 people in its Bay Area office and 800-900 at its operations center in Omaha, Neb.

PayPal moved to Mountain View in April 2002 after outgrowing its site in Palo Alto. The company was recently granted a permit by the City of Mountain View to use the lower floor of its building for offices, even though it was designated for retail use. When PayPal moves out, that space will be zoned for retail again.

Google, though, is staying in town as it moves to accommodate its growth. In the next few months, the popular Internet search engine provider will relocate its headquarters from its North Bayshore site to the campus currently occupied by SGI on Amphitheatre Parkway.

Google now employs more than 800 in Silicon Valley and anticipates more growth.

SGI, which is consolidating its offices to its Crittenden campus in Mountain View, will leave the property next to Shoreline Amphitheatre by August 2004. The high-performance computing company has gone through several rounds of layoffs since the economy began plummeting, and is now reducing its combined occupied square footage from 717,000 to 420,000.

"We are continuing to reduce our expenses to reach a break even point," said SGI spokesperson Lisa Pistacchio. The lease with Google and SGI's expansion at Crittenden will result in $14-$17 million per year in savings beginning in July 2004.

SGI's success has mirrored the general trend in the technology industry, with the exception of the period following 9/11. Because the company provides systems for homeland security and government defense, its stock rose in that period and it now comprises 35 percent of SGI's business.

However, its post-9/11 spike gave way to the bearish economy. It laid off 400 of 4,000 employees worldwide last May.

"I would imagine our competitors have empty buildings," added Pistacchio. "It's not an unusual situation."

E-mail Candice Shih at cshih@mv-voice.com