European companies are moving operations to the Silicon Valley, snapping up 
startups, and adopting a looser California culture. Here's a sampling:

COMPANY    SILICON VALLEY STRATEGY                  RISK

Alcatel
          Spent $11.3 billion in the      If French giant can't get
          past two years for six          hot products to market as
          North American Web companies,   fast as its new subsidi-
          including router maker New-     aries have in the past,
          bridge Networks and switch      American employees may
          builder Xylan. The goal:        desert in droves.
          Turn Alcatel into a Net-
          plumbing powerhouse like
          Cisco Systems.


Philips
          Dove into vigorous Valley       Dutch maker of TVs, light
          expansion in 1998 but           bulbs, and cell phones
          backed off a year later         still has too many layers
          when U.S.-based Internet        of management and runs Net
          chief Roel Pieper started       operations from HQ--both of
          accumulating too much           which can hobble decision-
          power--spooking Amsterdam       making. It has some breath-
          HQ. Still, with 3,000 work-     ing room: Its key competi-
          ers, mostly in chip             tors are in Japan and Korea,
          factories, the company is       struggling with bureaucracies
          the biggest Valley employ-      of their own.
          er after Intel.


Nokia
          Has avoided culture clash       Buying small companies
          by purchasing small compa-      protects Nokia's collegial
          nies that build niche           Euro-culture from what
          products for mobile com-        many Finns see as a poten-
          merce and Net telephony.        tial transatlantic infec-
          Relying on an alliance          tion of greed. But it
          with Cisco to fill out          leaves holes in the
          offerings of Internet           company's product offer-
          infrastructure gear.            ings. And by outsourcing
                                          Net heavy lifting to
                                          Cisco, Nokia could become
                                          a marginal player.


Ericsson
          Has bought a constella-         Ericsson has always been
          tion of tiny Net start-         slow: Net phones preview-
          ups that make routers           ed 18 months ago are only
          and other gear aimed at         now hitting the market.
          Net access and Internet         Small acquisitions do
          telephony. Still,               little to transfer
          Ericsson is counting on         Valley culture that might
          Swedish engineers--experts      light a fire under the
          in voice systems--to deve-      telecom giant.
          lop key data technology.


SAP
          German software king has        German headquarters still
          built a strong presence         calls the shots, slowing
          in the Valley, with a           down the Silicon Valley
          development center employ-      operation to Old World
          ing 400 engineers. And it       speed. If this prevents
          has earned hundreds of          the California venture
          millions of dollars with        from making SAP a force
          investments in the likes        in e-commerce software,
          of U.S. software makers         the 1990s star could find
          Commerce One and Red Hat.       itself bogged down in the
                                          21st century.


Telefonica
          Spanish phone company           The former monopoly phone
          built the Continent's           company could weigh down
          first Net titan, Terra          the Net business. Compet-
          Networks, which has opera-      ing against Yahoo! and
          tions in Europe and Latin       AOL throughout the
          America. It then bought         Americas and Europe,
          U.S.-based portal Lycos         Terra can ill afford to
          in a $12 billion deal           wait for faxes from Madrid.
          that makes Terra a global
          Net powerhouse.