Using molecular orbital approach and the generalized gradient approximation in the density functional theory, we have calculated the equilibrium geometries, binding energies, ionization potentials, and vertical and adiabatic electron affinities of SinOm clusters (n less than or equal to 6,m less than or equal to 12). The calculations were carried out using both Gaussian and numerical form for the atomic basis functions. Both procedures yield very similar results. The bonding in SinOm clusters is characterized by a significant charge transfer between the Si and O atoms and is stronger than in conventional semiconductor clusters. The bond distances are much less sensitive to cluster size than seen for metallic clusters. Similarly, calculated energy gaps between the highest occupied and lowest unoccupied molecular orbital (HOMO-LUMO) of (SiO2)(n) clusters increase with size while the reverse is the norm in most clusters. The HOMO-LUMO gap decreases as the oxygen content of a SinOm cluster is lowered eventually approaching the visible range. The photoluminescence and strong size dependence of optical properties of small silica clusters could thus be attributed to oxygen defects.