Betting on bytes

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: Every year, many leading lights of the internet world congregate at the Web 2.0 Summit in San Francisco. The 2009 event, which took place this week, included an evening reception thrown by a venture capital company at a swanky hotel and was dubbed “Web After Dark”. And evidence is growing to suggest that the darkness that has hung over the information technology (IT) industry for many months is lifting.

Three of the sector’s heavyweights—IBM, Intel and Google—recently reported surprisingly robust profits. Even Yahoo! did less badly than expected. On Monday October 19th Apple stunned even the most bullish investors by posting its best quarterly results ever: third-quarter revenues came in at $9.9 billion—24% higher than the same period a year earlier. Then came the news that venture capital investments in America are growing again. And Windows 7, Microsoft’s new operating system, launched on Thursday, is expected to drive demand for personal computers and related wares.

The outlook for IT firms in other countries is also brighter. The OECD detected signs of a recovery as early as August, particularly in Asia. Countries such as South Korea and Taiwan, which boast many companies specialising in chips and hardware, had been hit particularly hard by the downturn, with production in some sectors dropping by as much as 40%. But now that inventories have been depleted, manufacturers there are cranking up production again.

All this is more than welcome. But the wave of good news has already restarted the hype machine, for which the IT industry is well known. Once again, the sector is being trumpeted as the saviour of the economy. Some even predict that IT will pull the economy out of recession, with investment in technology giving a swift boost to productivity and job creation.