• USA Today, Thursday, February 2, 2006 10:15 AM

So we're in the middle of an Internet and tech industry renaissance, eh? Well, you certainly wouldn't know it looking at the Nasdaq, USA Today says. Outside of Google, which is already on its way to rebounding after an earnings hiccup, and maybe Yahoo, Wall Street's reaction to Internet stocks has been decidedly tepid considering all the talk of a second coming. This is a completely opposite problem from six years ago, when tech stocks excited the Street but the companies themselves were a standing house of cards. In fact, it’s a whole different world:: investors need to see real products, real cash flow, and real earnings before they'll buy--almost to a greater extent than in other sectors. In many ways, investment analysts say this is a healthy change, since companies must show their worth before investors will infuse them with the cash to expand. So for now, Internet stocks remain under greater scrutiny than other sectors, and rightly so, according to USA Today: in 2005, the paper's index of 50 Internet stocks increased just 1 percent. Without Google, it would have lost 8.2 percent. Meanwhile the Nasdaq as a whole inched up 1.4 percent last year and the Standard & Poors 500 gained 3 percent. However, 48 of the 50 Internet stocks in the USA Today index saw their collective profits quadruple since 2000--and that doesn't even include Google, which only went public in 2004.

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