Taking Stock / Recognise 2,718,281,828?

$204 million - that's Google's cash flow from its operations in the first quarter of this year. Its prospectus shows the company's profits to be a lot bigger than even the headlines have indicated.

Sure, the $105 million the company netted in 2003 was impressive. But when you take note of what accounting rules it chose to follow, the numbers are even more eye-popping. Just how does a company go from $105 million net profit in 2003 to $204 million cash flow in the space of a single quarter?

First, Google is growing exponentially. It ended the first quarter of 2004 with revenues of $389 million, compared to $308 million in the previous quarter and $179 million in the first quarter of 2003. Google's growth hasn't fallen below 15 percent since it was founded.

Second, Google opted for the most conservative accounting policy possible. It expenses all the options it gives to its workers, a policy other Internet giants like Yahoo! and eBay have eschewed. If they also expensed stock options, their profits would look a lot smaller.

From the start of 2003, Google has booked costs of $300 million on stock options, of which $76 million was in the first quarter of this year. Of course, stock option costs don't involve cash outlay, which is why Google is generating money at a much higher rate than is presented in its recorded net profit.

$450 million - that's how much cash Google has accrued since it was founded. Compare that with the $38 million it raised on launch. Unlike the vast majority of media, Internet, software and communications companies, including the best and the brightest, Google hardly raised scarcely any money at all when it got to its feet, yet it started generating cash pretty fast. Last year, its fourth, it generated $395 million cash. This year, as we said, it began with $204 million in the first quarter alone.

Google will continue to generate cash that far exceeds its net profit, because of its conservative accounting policy. The company's revenues are likely to reach $2 billion this year and its cash flow about a billion dollars, plus the $2.5 billion it's likely to net from its initial public offering.

1999 - that's the year Google was launched. In 1998 the company was just an idea of two Stanford students but by 2001 it was in profit. Revenues had reached $86 million and it netted $7 million.

96 percent - that's the proportion of revenues from advertising in Google's first quarter this year. The company is perceived as a technology venture and its unique search algorithm is what most articles about it discuss. But at the end of the day, Google is really a media company that makes money selling ads - just like a newspaper or TV channel.

Google has massively debunked the myth that the only model possible for Internet business is user fees. Advertising on the Internet works, and works beautifully for it and for Yahoo!, too. Year by year advertisers are routing more resources to Internet, to sites they think will provide value for their money.

Yet here lies the greatest threat to Google's future - it is a media company that grew out of a technology company. Its two founders and CEO have no background in managing media and advertising businesses. Yahoo! also began with a technologically-oriented management but at some point had to lose it and bring in Terry Semel, a media veteran, to rehabilitate the company.

30, 31 - those are the ages of Larry Page and Sergey Brin, Google's founders. They established Google aged 25 .After the IPO, they'll still hold 15 percent of the company's shares. Three years after the Internet bubble popped, after tens of thousands of startups launched by arrogant young entrepreneurs vanished, Page and Brin have restored the dream of young revolutionaries spearheading a breakthrough in the business world that even threatens established giants.

13 - that's how many times the word `Microsoft' appears in Google's prospectus. Bill Gates is the company's Enemy No. 1 and that's the worst possible enemy a company can have. Not only is Microsoft an aggressive company with the biggest mountain of cash in the world - around $60 billion - it's also a rival that has explicitly said Google is in its sights. Microsoft means to incorporate a Google-type search engine into its operating system with the aim or rendering the invention of Brin and Page pointless.

It is a battle of titans over innovation, speed, and business strategy. If Google blinks, it could rapidly lose its market to Microsoft, to Yahoo!, or to some other newfangled search engine as yet unborn.

$25 billion to $35 billion - those are the figures being touted as Google's value on the market. Either figure would make Brin and Page among the richest youngsters in the world. A day after the offering each will be worth $4-$6 billion.

$2,718,281,828 - that's the amount Google means to raise in its IPO, its prospectus says. Sharp-eyed mathematics fans will immediately recognize the joke, so typical of the Googler geeks. It is the mathematical value of e (the natural or base logarithm) multiplied by a billion.

Google - that's the company name, itself derived from the word that means 1 followed by a hundred zeroes. But after their IPO, Googlers can fairly attach a new meaning to the symbol e. E-normous valuation.