Update: In response to the story, Valve PR frontman Doug Lombardi messaged Joystiq the following:
"As a point of clarification, this is probably better categorized as Valve hiring two new employees instead of an acquisition of a company or opening of a Valve SF office."
Last night we received a tip from Valve Time that Valve would be setting up a (very) small studio in San Francisco with plans to expand. In November, Valve acquired the 3-month old two-man startup Star Filled Studios. Small in stature, large on talent would be a solid description of Star Filled, whose founders appear to know each from way back. The San Francisco studio is now expanding. What are they working on? Only Gabe Newell knows.
Star Filled Studios' founders are named Tod Semple and Jeff Gates. Both software developers worked on creating PayPal, both worked on Diablo III, and both worked on the small team that originally created Plants vs. Zombies. In the three months after they both left PopCap, they must have come up with a game quite brilliant, as they flew up to talk with Valve in November and must have been acquired immediately.
Whatever Valve and the new team in San Francisco are planning must be interesting. Valve's previous acquisitions have been the teams behind Left 4 Dead, Counter Strike, and Portal. That is to say, Valve makes very intelligent acquisitions that typically result in excellent games. What a two-man team from a studio that's only three months old could have made to persuade Valve is going to drive me crazy. Time will tell. Valve time.