The US Cisco Systems company, which makes computing devices that route information across the Internet, has surpassed Microsoft as the world's most valuable company. Its elevation is being seen as a mark of the Internet's emerging status as the dominant force of the new economy. Analysts say Cisco's rise marked a milestone in the ongoing technological revolution. This is the first time an Internet company, a Silicon Valley company or a Californian company has risen to the top of the global heap, joining the ranks of such behemoths of the past as Standard Oil, General Motors, IBM and, most recently, Microsoft, the software giant that defined the age of the personal computer. The core of Cisco's business is making routers, which are devices that look at each piece of information that flows across computer networks and route the information toward its proper destination. The devices are found at the junctions of networks, making the routers the main building blocks of the information infrastructure. Analysts described Cisco's move upward as part of an inexorable evolution in technology in which influence has begun to shift away from the companies that created the personal computer, and toward companies that are powering the global networks of the future.

Finance professor Mr Tim Campbell at the University of Southern California said there was a powerful message about the new economy embedded in the simplistic statistic of the two companies' market capitalisation.

In the past, a company's stature was often based on its annual revenues. But in the go-go technology revolution, market capitalisation, which measures investors' perceptions of a company's future, often carries more weight.