Google overtakes Time Warner

  Google was founded seven years ago by two computer science students with a cheque for a hundred thousand dollars from a benefactor. Their first base for operations was a college dormitory in California. What they offered was more efficient technology for accessing information from the internet, and their creation, Google, rapidly emerged as the most used internet search facility.

It became a public company with shares traded on the stock market just ten months ago. Initially investors had doubts forcing Google to cut the opening price of the shares, but since the launch they've trebled in value. Financial markets haven't seen anything like this since the dot com boom of the late 1990s, which was followed by an equally dramatic crash.

There are some solid reasons for Google's recent success - the company has shown three quarters of spectacular growth - yet apart from its shares this is still a relatively modest sized business with revenues of just 3.2 billion dollar last year. This week the total value of Google's shares has reached 81 billion dollars slightly higher than Time Warner, which has revenues of 42 billion dollars a year.

Most of Google's income comes from a single source - fees for links to advertisers sites that appear next to search results on Google. Despite the success, some investors are wondering whether this company is really worth more than one that owns a Hollywood studio, CNN television, magazines and the many other substantial assets that Time Warner has.

Mark Gregory, BBC News

Vocabulary:

benefactor : a person who gives money for a good purpose

efficient: working well and without any waste

emerged as: became

public company: a business company which offers its shares for sale (on the stock exchange)

trebled: increased three times

dot com boom: a period when internet companies ('dot coms' from the abbreviation '.com') became very popular on stock exchanges and their values increased sharply

revenues: money a person or a company receives from something

assets: valuable things which belong to a person or a company

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