Why are all the major computer companies based in San Francisco?

The weather rocks.

Because, all the computer companies are based in SF.

Many of the biggest technology companies (Adobe, AMD, Apple, Cisco, eBay, Google, HP, Intel, Oracle, Sun, Yahoo) are actually based south of San Francisco, in Silicon Valley.

not all Austin TX is a tech town.....Dell and Apple have major offices there

Is that a dig a Micro$oft?

you can network much better when everyone is in the same pool. Such as competitors, investors, employees, etc.

The bay area is also a creative melting pot with endless inspirational elements.

But most importantly, "cause everyone else is".

True gooch, as well as AMD, and HP in Houston (among others)

If you are starting a new tech company, the people you want to hire are most likely in Silicon Valley. Not all tech companies are based in Silicon Valley, just a disproportionate amount.

Wikipedia has a good history of how Silicon Valley became Silicon Valley.

The area had roots in military research. Then in 1951 Stanford established an industrial park specifically for high-tech firms. It's also where much of the early work on the transistor took place and the semiconductor industry emerged.

(I'm basically summarizing Wikipedia's first few chapter headings)

There is a historical marker outside of HP garage (at 367 Addison Avenue in Palo Alto), the so-called "Birthplace of 'Silicon Valley'", which reads:

"...The idea for such a region originated with Dr. Frederick Terman, a Stanford University professor who encouraged his students to start up their own electronics companies in the area instead of joining established firms in the East. The first two students to follow his advice were William R. Hewlett and David Packard, who in 1938 began developing their first product, an audio oscillator, in this garage."

Another contributing factor to this is that the largest Backbone to the internet terminates in the silicone valley. This makes it very desirable for internet companies who require maximum speed of data.

Are they some of the only companies who can afford the “free market” cost of rent there?

Amazon, Microsoft, Real Networks and others are located in Seattle, not the bay area. There just happens to be a larger concentration in that area than anywhere else.

People don’t like variety.

Because the Bay Area f-ing rules.

Paul Graham wrote a pretty good article about the effect of cities on success, ambition, &c. Worth a read through if you’re interested in location.

I notice that you’re all conveniently not mentioning Redmond, Washington (outside of Seattle)—home of Microsoft.

I’m familiar with the greater Silicon Valley area, though. My best friend’s brother co-founded Autodesk and co-invented AutoCAD. Autodesk is located outside of Silicon Valley, however, in the city of San Rafael (just across the Golden Gate Bridge from San Francisco), whereas Silicon Valley is located in the San Jose area.

Pshh shush marshall nobody cares about Microsoft. Haha no just kidding. Its because California is one of the best places to live :)

@MrBlogger: SOME parts of California, such as its Central Coast—where I currently live. However, I’m actually thinking of moving back to Seattle (where I moved down here from, although I was raised in L.A.), because I’m a “big city” boy and the beautiful—but too little—town I’m living in is driving me nuts! I wouldn’t touch the L.A. of today with a ten-foot pole; it should be re-named North Tijuana!

Not reallly I know Dell is in Texas Round Rock ..

Because they know the fabled earthquakes to come are simply rumors and are waiting for the evacuation so they can buy the entire Bay Area.

Silicon Valley, New York (google for “Silicon Alley”), Seattle area, Austin, Atlanta all have strong concentrations of tech companies. The first three probably have the highest concentrations of startups.

Reasons: SF area, NYC & Seattle for obvious quality of life (no problem attracting employees); Atlanta because it’s a travel hub & the area is a manufacturing hub; Austin because it’s a arts-filled and liberal hub in a very conservative region (quality of life, again, and concentration of forward-thinking young/tech-connected people).

A first generation of companies spawned around the likes of HP and Fairchild Semiconductor have resulted in a great ecosystem of educational institutions, talent and venture money. Similar thing happened in LA for motion picture biz. And I guess Detroit to some extent. Initially not sure what conditions prevailed for HP and Fairchild. I think there was some military research nearby, too so DOD was likely a source of talent and cash, too.

Its because many homosexuals work for these companies ;)

makes it easier to poach engineers from one another.