Silicon Valley Gold Rush

Silicon Valley, the world's high-tech epicenter, ranks with Wall Street and Hollywood as one of America's mythic places.

Sprawled along a 30-mile long corridor stretching from San Francisco south to San Jose, the Valley is home to 7,000 software and electronics companies with a combined market value of $450 billion.

More than a third of the world's 100 biggest high-tech firms launched since 1965 - Apple Computer, Cisco Systems, Intel, Oracle, Silicon Graphics and Sun Microsystems, to name a few - are based here, fueling the modern-day equivalent of a gold rush.

In the past several years, a new generation of leading Internet companies, such as Yahoo, Excite, EBay and E-Trade, has exploded onto the scene, building on the high-tech revolution started by their predecessors in the software and hardware industries.

In the high-risk, high-reward ethic of the Valley, the ultimate Holy Grail is a good idea that could become a billion-dollar business. Hundreds of venture-capital firms have set up shop in the Valley in hopes of bankrolling a fledgling company that could someday become another Intel or Microsoft.

The reigning granddaddy of Silicon Valley companies is Hewlett-Packard. The electronics company was founded in the 1930s by two Stanford University students with just $538 in start-up capital, and encouragement from legendary Stanford Professor Frederick Terman.

Hewlett-Packard also pioneered management practices that are now standard for Silicon Valley companies: an egalitarian corporate structure and profit-sharing.

The Valley's success is widely credited to a unique combination of factors: its picture-perfect climate; Stanford University's research facilities and leadership role in nurturing start-ups; a pool of high-tech talent; and a culture that prizes innovation. The Valley's self-replenishing system, in which the profits from one company are plowed back into new startups, has fueled the boom.

While Hewlett-Packard was instrumental in starting the Valley's electronics industry, the computer revolution really took off with the invention of the silicon chip and the founding in 1968 of Intel, now the world's largest computer chip manufacturer.

To be sure, the Valley has its flaws: soaring housing prices, traffic jams, and congestion.

But with its booming economy and ability to keep reinventing itself, the Valley shows no signs of slowing. Indeed, its influence has spread far beyond its physical boundaries. Today, the globe is dotted with high-tech hotspots, up-and-comers in the expanding growth of technology industries around the world.