101 IS ROAD TO HEALTHY PROFITS FREEWAY CORRIDOR FIRMS OPTIMISTIC.

Byline: Jesse Hiestand Staff Writer

The Internet has erased borders and essentially shrunk the world, but Errol Ginsberg never figured the tech boom would find his network equipment startup on one side of Calabasas' Agoura Road and his chief rival on the other.

The standoff between Ginsberg's Ixia and the SmartBits division of English-conglomerate Spirent PLC reflects the tangle of adversaries and alliances among companies crowding the Highway 101 corridor.

``We don't know any more about them because they're across the street but we do compete for the same people when we're hiring,'' said Ginsberg, who founded Ixia after leaving SmartBits when it was known as Netcom Systems Inc. in Chatsworth.

SmartBits president Gil Cabral enjoys the close company of a rival that also makes high-end circuits to simulate Internet traffic for leading router manufacturers like Cisco Systems Inc. and Nortel Networks Corp.

``Obviously we're competitive, but we feel it's very good for the company - it makes us sharper and more sensitive to the market,'' Cabral said.

Staying attuned to trends in the tech sector will be crucial in the coming year for the 600 or so companies loosely clustered along the Ventura Freeway from Sherman Oaks to Camarillo.

The dot-com shakeout of spring 2000 is still being felt as the Nasdaq slumps, struggling Internet firms close shop or lay off staff and Web-based retailers brace for the results of a make-or-break Christmas season.

In some ways, the 101 corridor and its 115,000 employees may be in a better position to weather the storm than emerging tech zones like Santa Monica, with its heavy emphasis on Web-based entertainment firms.

Many 101 corridor companies offer equipment or services that underpin the Internet and the continued build-out of fiber-optics and high-speed networks.

``This is the nuts and bolts of the network,'' said Victor Hwang, chief operating officer of LARTA, the technology alliance for Southern California, which has studied the 101 corridor's evolution. ``You're not betting on any one type of Internet company. You're betting on the fact that all these tech revolutions will keep moving forward, which is a much safer bet.''

Still, serious uncertainties remain, especially with mounting evidence that the economy may continue to cool in 2001.

``I would anticipate that revenue sales growth will slow next year for many of the firms out there, but I really don't see a dramatic downturn that other areas have experienced because less of the firms are true dot-coms,'' said Ross DeVol, director of regional studies for the Milken Institute in Santa Monica. ``I'm sure there's going to be a few casualties out there, but given what's happened in the dot-com sector, they've done very well overall.''

The emerging tech corridor of the San Fernando and Conejo valleys has moved to fill the vacuum left by downsized aerospace and defense industries. Already ranked 46th among all metropolitan areas in the United States in terms of technology output, the area is poised to become a powerhouse.

``For a long time, the Ventura Freeway region was treated as the red- headed stepchild by the whole L.A. region, but it's really grown up,'' Hwang said. ``Now it's the class reunion - and she's the supermodel.''

Where old-line tenants like Rockwell Science Center in Thousand Oaks continue to innovate and giants like Amgen Inc., the biotech leader also in Thousand Oaks, anchor the corridor, it is increasingly the smaller companies, some still privately held, that are setting the pace.

Nineteen of the region's 50 fastest growing technology companies lie in the 101 corridor (counting Chatsworth, which is generally considered part of the corridor), according to a Deloitte & Touche survey of tech companies from Santa Barbara to Riverside counties.

Digital Insight Corp., the Calabasas maker of banking software, topped the list, posting almost 20,000 percent revenue growth over the past five years, almost twice that of second place Earthlink Network Inc. of Pasadena. Amgen, by comparison, ranked No. 49.

``The lion's share of the 50 are companies that are really making tangible products that either serve the Internet or some other technology,'' said Dan Benson, a partner in the technology and communications group of Deloitte & Touche.

Benson anticipates a good year for many of these companies as venture and other capital continues to pour in, encouraging some employees to spin off their own companies.

That's what Ginsberg did in 1997, starting Ixia after sensing a demand for innovative products in the $875 million network performance equipment industry. Ixia went public on Oct. 18 and soon reported a 198 percent year-over-year growth rate.

Maintaining that momentum means finding and retaining qualified employees, Ginsberg said. The talent pool in Southern California is reasonable but not remarkable, forcing his company to recruit from outside the state when unable to find talent locally or at the area's universities, including California State University, Northridge.

In those cases, the 101 corridor becomes a selling point, he said.

Cabral, of rival SmartBits, has the same assessment.

``When you bring in high-level talent, they're looking for communities that are safe, have very good school systems, and that's how you attract people,'' Cabral said. ``The location is superb. The situation as far as housing is very good.''

Peter Dille was one of those recruits about a year ago, moving from the Bay Area to become marketing vice president for THQ Inc., the Calabasas Hills game maker that has been in the corridor for 10 years.

``To be honest, when I initially thought about moving to L.A. I had to give it some thought,'' Dille said. ``But I realized this really wasn't L.A. The negative connotation people have about L.A. - traffic congestion, smog - don't really apply because I live in Thousand Oaks and commute 15 minutes to the office.''

Cliff Michaels, president of Firstuse.com, had considered the Bay Area when starting his company, which time- and date-stamps documents for authentication on the Internet.

He instead choose Westlake Village, partly because he and founding partner Craig Honick were natives of the area, but also because there was less traffic and office space was far cheaper.

``Silicon Valley is built out. Physically they don't have space, even homes, and when that happens, you have financial barriers if you're not making a lot of money,'' Michaels said. ``The 101 corridor is an ideal location to build companies.''

The reckless spending that supported some tech and dot-com companies is over, but the industry is still in its infancy and poised to grow, he said.

``The growth potential here is where others were at three or four years ago,'' Michaels said.

CAPTION(S):

2 photos, map

Photo:

(1) Gil Cabral, president of Spirent PLC division SmartBits with some of his company's test boards, says he enjoys across-the-street rivalry that stimulates competition.

(2) Errol Ginsberg, founder of Ixia with his company's test boards, said his firm and his neighbors compete for many of the same workers when hiring new employees.

David Sprague/Staff Photographer

Map: 101 CORRIDOR