WIRED ON FRIDAY: There are still plenty of ideas swimming around Silicon Valley, but its inhabitants are having trouble finding a business model to match them, writes Danny O'Brien

When faced with an invincible enemy dead ahead, Star Trek's Jean-Luc Picard, noble captain of the Starship Enterprise, would instruct his team to "randomly modulate the phaser frequencies".

Translated into 21st century English, this means: "Both the crew of the Enterprise and the scriptwriters have no idea what to do, so we're just going to twiddle blindly with the phasers until we hit something." As pseudoscientific babble goes, it stands as the model of desperate improvisation for technological solutions.

Faced with one of the worst falls from financial grace in recent memory, Silicon Valley, ever the ape of Star Trek, is modulating its phaser frequencies in as random a way as you have ever seen. Its business leaders are currently zooming up and down the technological spectrum, looking for wild ideas - any idea - that will lead the industry out of its current doldrums.

Of course, such speculation is what Silicon Valley does, ever since banker Arthur Rock convinced city investors to put money behind the mere idea of Intel microprocessors. But the Valley's creativity always turns up a notch during recessions. In boom times, much of industry was happy to lazily imitate its neighbours. When your neighbours are filing for bankruptcy, more creative solutions are needed.

Now, matters have clarified. A flick through the position papers and press releases of the Valley reveal its new directions. The old money-maker, the World Wide Web, is being replaced by three new Ws: WiFi, Web Services, and Warez. "WiFi" is a cheap-and-cheerful wireless networking standard that lets you connect PCs and laptops to local computer networks without wires. Also catchily called 802.11b, this rather mundane technology was intended only as a convenience for businessman using laptops in office environments.

As prices of WiFi cards have dropped (and connection speeds improved), though, users have stumbled upon dozens of ingenious uses for the gadgets. Home users buy WiFi cards to save on wiring and so they can surf in the garden. And mobile WiFierscan get access by connecting to open networks at hotels and airports.

Some even use WiFi as a poor man's 3G telephone system, discreetly gatecrashing from one open and insecure WiFi office network to the next as they move around town.

Web services are, effectively, Web browsers, not for people, but for programs - allowing computers to automatically surf for and process internet data that you would normally have to dig out by hand. The idea is that rather than wasting time surfing the Net, ordinary programs like your word processor or spreadsheet can tap into all the data on the Net. It's what Microsoft is excited about this season (their ".NET" gamble is based around Web Services), and that always attracts a crowd of investors.

And the final "W" - Warez? Well, that's perhaps a little unfair a term. Warez is the street slang for illegally copied software here. It used to be that you'd get those files from a friend. Nowadays, you download them from the dozens of file-sharing services available online. These services are the direct descendants of the music-sharing Napster. Except these days, Napster has been replaced by a fistful of other file-sharing programs that let any data be disseminated - including movies and software.

Tarred with the same brush as Napster, which was widely used for distributing copies of popular songs for free, these new services are widely assumed to be vehicles for piracy: warez, tunez and moviez, as they say.

In fact, Silicon Valley sees them as an exciting new way to distribute legitimate data efficiently across the whole of the internet. In their more law-abiding form, these services are known as "peer-to-peer" or P2P programs. That's because they allow Net-connected PCs to talk directly to each other, rather than have a centralised server brokering all the requests.

Got all that? Good. You're doing better already than much of the IT industry, who can sense that there's something in all of these disparate possibilities, but has yet to really wrap their heads around any of them.

That's not to say that they're not taking off. It's a given in Silicon Valley that technologies explode before anyone truly knows the ramifications. World-leading search engine Google, for instance, is showcasing its use of Web Services with a plug-in that allows any computer program to connect directly to its database, and sift through the two billion webpages stored there. Free P2P programs, despite the music industry's best efforts, are spreading like wildfire. And 1.5 million WiFi cards are sold for laptops every month, so something's happening in that sector.

The problem, as ever, is that while the Valley has plenty of ideas, it is having a great deal of trouble finding a business model to match them. Again like Star Trek's 24th century, there's plenty of magical technology here, but no money. Web Services sound useful, but charging for anything on the Web is still a risky proposition - Google certainly does not charge (yet) for its service.

Despite the massive user uptake of P2P programs with names like Gnutella and Kazaa, no-one has yet worked out a way of turning them into revenue streams. And there's a widely held feeling that the moment someone does pull money out the post-Napster market, Hollywood will instantly litigate every penny away.

What about WiFi? Now there, many venture capitalists believe, is the hot trail. A few dotcom-league failures have already scared some investors from the sector, it's true: one company here, MobileStar, foolishly expended millions installing WiFi connectivity in every Starbucks in the US - with only a few thousand customers to use them. After such gallant idiocy, though, the researchers have gone back to their labs, and a slow trickle of ingenious ideas based around WiFi has begun to emerge.

My favourite at the moment? A company called Vocera, which has just revealed a badge with a microphone and a WiFi connection. It's a voice-operated walkie-talkie about the size of a marker pen. Clip it onto your collar, call someone's name into it, and it'll automatically connect you. You both talk through your badge.

It's aimed at hospitals and warehouse workers who don't necessarily have their hands free and can't use standard cellphones, they say. But anyone who sees the prototypes knows what it is. It's Jean-Luc Picard's communicator badge. It's a good rule. If the future's uncertain, steal from Star Trek.