Technology investors expect a rash of new issues this year, inspired by last year's runaway success for Google and growing evidence that the Internet has become a major business force.
If the market holds out, there would be a lot more new issues to come, said Michael Sandifer of Amerindo, one of the largest and earliest technology funds. "That is always good for getting investor juices going," he said.
He cited CommVolt, a software storage specialist, as one possibility from Amerindo's portfolio.
Google shares have more than doubled in price since they were floated at US$85 in August, while the price of other internet successes such as Ebay and Yahoo has also soared. Sandifer admits that current share valuations are "not for the shy and retiring." But he points out that online consumer spending over Christmas in the US rose by almost 30 percent, while other retailers had a lackluster period.
"They [Internet retailers] are taking shares and there is no reason why they cannot continue to grow. The change is the increasing willingness, particularly by female consumers, to trust the Internet a bit more with the credit card," he said.
Revenues of the Ebay auction house, for example, rose by more than 50 percent in the third quarter of last year and analysts expect more than US$15 billion of goods to be sold through its site this year. This could grow to more than US$100 billion within five years as Ebay continues its march into China and other developing economies.
While conventional retailers such as Wal-Mart and Marks and Spencer have to invest in buildings, shop assistants and stock, Ebay does not.
"It is going to continue to be one of the premium growth stories going forward," Sandifer said. That means it could justify its high share price -- its shares stand at close to US$120, giving it a price-earnings ratio of more than 100.
Ebay and Google were exceptions, however. Most technology shares had a disappointing year last year as investors fretted about the high oil price and the level of business spending on IT (although Amerindo's Internet fund outperformed its indices).
Sandifer says there are signs that business spending is starting to pick up, while applications such as voice over Internet protocol, which allows consumers to use their computer as a telephone, are becoming more popular.
Everything promised during the hype of 2000 has come to pass, Sandifer says, except the financial rewards. Most technology companies are still trading at a fraction of their peak price, if they still exist at all.
"In retrospect, valuations were too high. We ate our desserts four times and three meals in one sitting," he said.