After years of businesses downsizing and closing, rounds of lay-offs, shrinking salaries, and extremely limited hiring, Silicon Valley companies are now experiencing higher profits, creating more entry-level positions, and increasing paychecks.

Industry heavyweights have led the expansion. Google posted third-quarter profits that were seven times higher than usual, and Apple posted a record-breaking yearly profit of one billion dollars citing tremendous iPod and iTunes sales. Ebay bought the Internet-telephone service, Skype, and Yahoo,

Google, and Microsoft are locked in a bidding war to buy a sizable portion of America Online.

Jack Brewer, director of the SF State Career Center, said that students with majors in computer science, computer engineering, and computer information systems are seeing more job openings. He also pointed out that salaries in these fields are gradually starting to rise.

“The number of job offers given to students in these majors is increasing, and we’re seeing entry-level salaries come back up. And employers predict this will continue through 2006,” Brewer said.

The U.S. Department of Labor also reports that students who major in engineering or computer science receive the two highest average starting salaries. The average national starting salary for college graduates with engineering degrees is $49,636. Brewer said this amount is higher in California because of the state’s greater cost of living.

Martin Kenney, author of “Understanding Silicon Valley” and professor of human and community development at UC Davis, said the Internet is the savior of the Silicon Valley area, stimulating investors and beckoning entrepreneurs to start companies.

"Businesses are saving a lot of money because they no longer have to buy software, they can just pay a small fee and they have access to a suite of the same services on the Internet," said Kenney. "And companies no longer have to worry about security or technical headaches, because the big server in the sky provides professional support."

As the Internet’s influence increases around the world, more people are using search websites to hunt for information. Kenney credited search websites like Google as a major factor in sparking Silicon Valley's resurgence.

"As more people are scraping these gigantic Internet databases for information, this is creating more firms in the area," said Kenney.

But local think-tanks warned the upturn did not signal a return to the boom-days of the 1990s, and that people already halfway through their careers would still have much difficulty finding a job.

“The job market is better than it was four years ago when companies weren’t hiring anyone, but it’s not fabulous,” said Paul Saffo, director of the Institute for the Future, a Palo Alto think-tank. “But still, if I was looking for jobs in Silicon Valley right now, I’d rather be a just-graduated student than a mid-career manager. New graduates are in a strong position because they are up to the minute in their skills. They’re freshly trained in the latest technology and programs, and they’re cheaper.”

Being in the heart of the valley, San Jose State University has witnessed a surge in the number of businesses looking for recruits on campus. Donna Gilmour, employer relations consultant at the San Jose State Career Center, said the school had to turn away some companies from their annual job fair because all spots were filled.

“They were looking for new-hires for positions in business, engineering, finance, sales, and almost all areas really,“ said Gilmour. “More and more employers are seeing the advantages of college recruiting because it keeps them supplied with a constant pipeline at the entry level.”