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Best of 2008 posted on December 22, 2008

bizSanDiego.com’s exclusive coverage of 12 of the biggest, most inspirational and interesting business news stories from the past year. And, of course, we can’t highlight the best without shedding light on a few of the worst stories of 2008, as well.

Compiled by Jon Hindman and John Lincoln

News of the recession, stock market woes and corporate failures have dominated the national news over the past 12 months. It all seems doom and gloom, but truth be told, there are plenty of positive business stories that have been revealed throughout 2008. On the flipside, not all of the worst news has surrounded the nation’s dismal economy. Without further ado, here are bizSanDiego’s top 12 best stories of 2008, and the three worst.

BEST OF

No. 1
The Biotech Powerhouse
Invitrogen Corp., the Carlsbad-based firm that has provided life science technologies for disease research, drug discovery and commercial bioproduction, announced an earth-shattering merger agreement in June. The company acquired all of the outstanding shares of Applera's Applied Biosystems Group, formally headquartered in Foster City, Calif., in a cash and stock transaction valued at $6.7 billion.

This strategic combination will create a global leader in biotechnology reagents and systems generating approximately $3.5 billion in combined sales, with significant commercial, operational and technical scale, uniquely positioned to accelerate and drive new discoveries and commercial applications.

The company, which has adopted the new corporate name Life Technologies, will continue to operate out of Carlsbad. Greg Lucier, who has assumed the chairman and CEO position at Life Technologies, says that combining the forces of both companies was a decision that made perfect sense.

"Invitrogen and Applied Biosystems are both highly respected life science tools companies, with a rich history of cutting-edge innovation. Invitrogen is the premier supplier of reagents to the scientific community, and AB is the top provider of systems that use those reagents,” says Lucier, who was at the helm of Invitrogen before the merger. “Like razors and razor blades, it made absolute sense to bring the two together and provide a complete solution to our customers to help accelerate their research."

And, the company should also prove to provide an economic boost for the county.

"Life Technologies’ headquarters will be in Carlsbad and we'll continue to play an active role, as Invitrogen did, in the thriving life sciences community in San Diego,” Lucier adds. “As a global company with even greater reach, we'll offer more opportunities for people in San Diego interested in exploring a career with a leading science-based enterprise.”

No. 2
UC San Diego’s Craterous Impact
According to an independent economic analysis released in September, the University of California, San Diego contributes a whopping $7.2 billion in direct and indirect spending and personal income each year to the California economy and generates 39,000 jobs. And that just scratches the surface.

The economic analysis also revealed that companies started by UCSD faculty and alumni create an even more powerful impact. The total statewide economic contribution from UCSD startups is more than $37 billion annually. In San Diego County, these startups are responsible for approximately $32 billion in direct and indirect spending and personal income to the economy. In addition, these companies create nearly 115,000 jobs, the report found.

“UC San Diego changes the lives of San Diegans and Californians every day, through job creation, advanced patient care, disease and drug therapies, service in the local community and world-renowned research and education,” says UCSD Chancellor Marye Anne Fox. “This report demonstrates in hard numbers the powerful benefits created by our campus—billions of dollars injected into the economy and tens of thousands of jobs created. When combined with our leading-edge research and education, this latest analysis clearly shows UCSD’s local impact, national influence and global reach.”

No. 3
Speaking of IMPACTs...
One day each year, employees at the San Diego office of Deloitte put down their calculators and spreadsheets and pick up hammers, nails and paint brushes—all in the spirit of making San Diego a better place. Deloitte calls it IMPACT Day, an annual day of service during which all 40,000-plus employees nationwide are encouraged to participate in community service.

This year in San Diego, more than 150 Deloitte employees dedicated their IMPACT Day to Whitman Elementary School. The campus received a complete makeover: Deloitte helped the school “go green” by installing drought-resistant plants and building planter boxes from recycled materials. Volunteers also led all 350 Whitman students in a daylong course on ethics, social responsibility and the environment. Now in its ninth year, IMPACT Day is inspiring people all over San Diego to help the community.

No. 4
Funds Keep the Active Network Active
Who says companies aren’t getting funded? San Diego-based The Active Network, which delivers integrated technology solutions, marketing services and online media properties that encourage and enable participation in activities and events, closed its largest fundraising round in 2008. The noteworthy $80 million the company raised in August will be used to pursue acquisitions in key markets and leverage and scale the business around the infrastructure already in place.

ESPN was the lead investor. Other investors included Canaan Partners, North Bridge Venture Partners and Performance Equity Partners. The Active Network has made 11 acquisitions since the beginning of 2007, and hopes to continue its dominance.

No. 5
Unbelievable Growth
Would you be happy if your company grew 1,000% over a five-year period? Not too shabby, huh? Now, imagine if your company’s five-year growth eclipsed 28,000%? Impossible, you say. Well, according to Deloitte's 2008 San Diego Technology Fast 50 Ranking, Carlsbad-based Genoptix garnered the coveted No. 1 position with 28,288.52% revenue growth from 2003 to 2007.

Next in line was Rapid Product Development Group, headquartered in Escondido, with 7763.39% growth over the same period, which is nothing to scoff at.

Here are the top 10 Technology Fast 50 as listed by Deloitte:

Ranking	Company Name	5-Year Growth %	City
1	Genoptix Inc	28288.52	Carlsbad
2	Rapid Product Development Group	7763.39	Escondido
3	ESET	3134.12	San Diego
4	ID Analytics	2860.04	San Diego
5	Ethertronics	2386.12	San Diego
6	Illumina	1208.36	San Diego
7	Novatel Wireless	1171.34	San Diego
8	SpaceDev	1073.82	Poyway
9	DivX	995.56	San Diego
10	Anadys Pharmaceuticals	955.03	San Diego

No. 6
A Haven for Millionaires
Merrill Lynch and Capgemini released the annual World Wealth Report earlier this year, and despite market conditions, the number of millionaire households in San Diego increased last year and is expected to continue to increase over a five-year period. According to the report, the total number of millionaire households in San Diego is currently just less than 43,000, more than a 13% increase from 2006. And in the next half-decade, millionaire households in San Diego could increase by more than 24%.

The reason: While many factors such as the depreciating U.S. dollar, rising fuel and food prices, and slowdowns in the U.S. housing markets have contributed to the current market conditions, other factors like synergistic mergers and acquisitions and changes in market valuations have helped investor’s wealth continue to accumulate and grow.

No. 7
Biggest Week Ever
In July 2008, Coughlin Stoia Geller Rudman & Robbins LLP boasted a historic achievement. For the first time in it’s existence, the firm accomplished two mega-settlements in the same week.

In the first mega-settlement, Coughlin Stoia recovered a record $896 million for shareholders from UnitedHealth Group in a stock option backdating lawsuit.

The second mega-settlement came when the U.S. District Judge in Atlanta granted preliminary approval requiring Coca-Cola to pay more than $137 million to shareholders who sued the company for alleged violations of securities laws after the world’s largest soft-drink maker withheld information to boost its stock price. The settlement ended an eight-year battle with the company.

No. 8
Business Owners Ditch Work for School
On November 14, San Diego Unified hosted its annual Principal for a Day program, sponsored by Merrill Lynch and supported by the San Diego Padres. During Principal for a Day, more than 200 business executives assumed the roles of principals and learned first-hand the everyday challenges of running a school. This year, volunteers contributed approximately 90,000 hours of their time.

“Over the past 17 years, Principal for a Day has welcomed business leaders into San Diego Unified schools to partner with educators on reshaping classroom instruction to meet the needs of our future workforce,” says Kurt Madden, principal at Scripps Ranch High School. “There’s a lot we can learn from our business community, and we look forward to their continued commitment to our students.”

In these challenging economic times, Principal for a Day is a great opportunity for area businesses to offer their time and resources to local schools beyond monetary donations.

No. 9
Largest Biotech Convention in the World
In July, biotech-heads flooded to San Diego from near and far for the 2008 BIO International Convention held by the Biotechnology Industry Organization. Known as “the largest biotech conference in the world,” the convention drew more than 20,000 attendees, 21,000 exhibitors and 60 domestic, country and regional exhibitors to the San Diego Convention Center. Though diligent promotion, and with the backing of San Diego’s thriving biotech industry, this year’s BIO convention exceeded its attendance goals and more.

No. 10
Step Aside Alice, These Mushrooms Aren’t Edible
You might think it’s a joke, but CONNECT certainly isn’t laughing. For the second consecutive year, CONNECT has named San Diego-based Mushroom Networks as a finalist for its annual Most Innovative Product Awards. This year, Mushroom’s PortaBella product is on display. PortaBella, the first one-sided wireless broadband bonding appliance, delivers the fastest available mobile Internet connection for downloading and uploading media-rich data.

As you probably guessed, PortaBella isn’t the company’s only fungus-inspired product name. It’s Truffle BBNA and Porcini BBNA products both allow multiple DSL, cable modem or T1 services to be combined to provide higher speed and more reliable Internet access.

No. 11
Sempra Shines
Sure, just about everyone in San Diego knows Sempra Energy’s elite status on the annual Fortune 500 ranking, but the nationally renowned business magazine also has recognized Sempra for other achievements. This year, Sempra earned the No. 2 ranking among electric and gas utilities on Fortune’s 2008 “America’s Most Admired Companies” list, published in April. It is the second consecutive year the energy behemoth has achieved a top industry ranking in the magazine’s annual survey on corporate reputations. The company moved up from No. 4 last year.

Sempra Energy has also been widely recognized for its efforts to develop a diverse workforce and network of suppliers. For seven consecutive years, Sempra ranked among the top five of Fortune’s “America’s Best Companies for Minorities.”

No. 12
Best Mom of 2008
Lisa Druxman, the founder of San Diego-based fitness company Stroller Strides, was voted one of America’s Favorite Moms’ by NBC and Teleflora. She was flown out to New York City for an appearance on the Today Show, an exciting experience to say the least.

“The Today Show was a highlight in my career,” says Druxman. “They sent a production crew here to San Diego to film me and my family for the day. It was surreal to live my daily life with the Today Show following me around. That ended up being my most favorite piece. It really told the Stroller Strides story.”

Stroller Strides classes are offered in more than 800 locations in the United States and Canada. The hour-long classes emphasize cardiovascular activities and muscle-strengthening exercises using resistance bands and strollers, allowing moms to interact with their babies throughout their workout.

WORST OF

1
Drug Probe And Arrests at San Diego State
It might not be a true “business” story, but it did leave an indelible mark on San Diego earlier this year.

On May 6, 2008, San Diego State University suspended six fraternities after a sweeping drug investigation that landed dozens of students in jail on suspicion of openly dealing drugs on campus.

The probe, prompted by a cocaine overdose of a freshman sorority member last year, led to the arrests of 96 people, 75 of them SDSU students. A second drug death occurred during the investigation.

The bulk of the contraband was found at the Theta Chi fraternity house. Among the illegal paraphernalia uncovered were cocaine, ecstasy and guns. Authorities said 18 of those arrested were wanted on warrants for selling to undercover agents.

In a statement released after the arrests, SDSU president Stephen Weber said, "If guilty, they have ruined an untold number of lives. We are determined to remove people from our community who have placed our students at risk."

2
San Diego Pro Sports Stinkers
The San Diego Padres record for the 2008 season was a dismal 63-99, leaving fans with very little to cheer about. While the Padres didn’t manage to climb out of the cellar in the National League West division, the team did have a good enough run at the end of the season, including a three-game sweep of the weary Washington Nationals, narrowly avoiding owning the worst record in the National League. And now, the Padres may even lose out in the Jake Peavy sweepstakes.

At least San Diego sports fanatics had something to look forward to all summer while the Padres struggled: football season. After all, the Chargers were favored to be Super Bowl-bound. Alas, a 5-8 start has left something to be desired, and unless the home-town team is perfect from here on out and gets a lot of help from the Denver Broncos, chances are slim that the Chargers will even squeeze into the playoffs.

It’ll be interesting to see what off-season moves both teams make, and if they can avoid appearing on bizSanDiego’s “Worst Of” list again next year.

3
Scandal at SEDC
In July, it was revealed that Carolyn Y. Smith, president of the Southeastern Economic Development Corp., and her top deputy, finance director Dante Dayacap, shared $77,276 in taxpayer-funded bonuses and additional compensation in fiscal year 2005-2006. That year, Smith reported to the San Diego city council and SEDC's board that she would be paid a salary of between $130,000 and $160,000, but by the end of the year she had earned $206,328.

Voiceofsandiego.org broke the story following a review of SEDC's tax records, which uncovered a complicated system of unsupervised payments for top SEDC officials that were not adequately explained in its public budget.

The officials regularly received annual five-figure bonuses under payment programs overseen by Smith and carried vague titles such as "acknowledgement" and "cost of living."

In total, between fiscal years 2003-2004 and 2006-2007, SEDC's top four officials collectively received about $256,000 through the various bonus and extra compensation programs.

In the wake of this news, Smith and other executives were terminated. Currently, the SEDC is working hard to rebuild its reputation and get back on track.

Click here to read a first-had interview with SEDC representative Alexis Dixon about how the organization is moving beyond the scandal.