Mntsnow
05-05-2003, 6:24 AM
SAN FRANCISCO — After years of ridicule and ruin, Internet stocks are recapturing their charm and seducing investors again.\
The handsome stock market gains posted so far this year by eBay Inc., Yahoo! Inc., Amazon.com Inc. and other Internet companies have sparked a debate over whether the surge heralds a dot-com comeback or another investment bubble.
The optimists say Internet stocks are being embraced again because the once-forlorn sector is producing impressive sales growth in an otherwise lackluster economy.
Online auctioneer eBay Inc., for instance, began this year with first-quarter revenue of $476.5 million — a 94 percent increase from last year. Excluding the gains from acquisitions made during the last year, eBay's revenue still rose by 56 percent.
That kind of growth became even more impressive as a long list of brick-and-mortar businesses disclosed depressed first-quarter revenues amid the anxieties leading up to the Iraq war.
"The Internet is the only part of the economy that's really working right now," said venture capitalist J. William Gurley of Benchmark Capital, which owns a stake in eBay.
Pessimists, though, say Internet companies still aren't growing fast enough to justify their premium prices. The skeptics even question the value of San Jose-based eBay, widely regarded as the Internet's biggest business success.
At the end of April, eBay's shares stood at $92.91 — a 37 percent gain since the end of 2002. The price translated into a price-to-earnings ratio of 64, based on average analyst estimates of its projected 2003 profit.
Investors commonly use the price-to-earnings, or "P/E," ratio, to size up a company's value. The P/E for the entire Standard & Poor's 500 stock index is about 17, according to Thomson First Call, which compiles analyst estimates.
Read more of this DeseretNews story (http://deseretnews.com/dn/view/0,1249,490032830,00.html)
The handsome stock market gains posted so far this year by eBay Inc., Yahoo! Inc., Amazon.com Inc. and other Internet companies have sparked a debate over whether the surge heralds a dot-com comeback or another investment bubble.
The optimists say Internet stocks are being embraced again because the once-forlorn sector is producing impressive sales growth in an otherwise lackluster economy.
Online auctioneer eBay Inc., for instance, began this year with first-quarter revenue of $476.5 million — a 94 percent increase from last year. Excluding the gains from acquisitions made during the last year, eBay's revenue still rose by 56 percent.
That kind of growth became even more impressive as a long list of brick-and-mortar businesses disclosed depressed first-quarter revenues amid the anxieties leading up to the Iraq war.
"The Internet is the only part of the economy that's really working right now," said venture capitalist J. William Gurley of Benchmark Capital, which owns a stake in eBay.
Pessimists, though, say Internet companies still aren't growing fast enough to justify their premium prices. The skeptics even question the value of San Jose-based eBay, widely regarded as the Internet's biggest business success.
At the end of April, eBay's shares stood at $92.91 — a 37 percent gain since the end of 2002. The price translated into a price-to-earnings ratio of 64, based on average analyst estimates of its projected 2003 profit.
Investors commonly use the price-to-earnings, or "P/E," ratio, to size up a company's value. The P/E for the entire Standard & Poor's 500 stock index is about 17, according to Thomson First Call, which compiles analyst estimates.
Read more of this DeseretNews story (http://deseretnews.com/dn/view/0,1249,490032830,00.html)