Taking Stock / Who Is It?

For the first quarter of 2004, it presented revenues of $757 million and a net profit of $101 million. Cash flow from operations reached $250 million in the quarter, lifting its net cash position, minus loans, to $2 billion.

Who is it?

Here is another clue. For the parallel quarter of 2003, it reported revenues of $280 million and a net profit of $46 million. Much of its leap in income and profit was fueled by acquisitions. But, even excluding that, its organic growth was more than 30 percent.

The management and Wall Street analysts expect the quarter to be the first in a strong year, in which sales and earnings will grow from quarter to quarter.

Who is it? More clues?

It's a media company whose revenues originate mostly from advertising and subscriber fees. It was established 10 years ago and, other than the CEO, all the members of the management team are 30 to 40 years old.

Who is it? Not guessed yet?

Here's one more clue. Its founders, Jerry Yang and David Filo, are 36 and 37 respectively and each owns more than $2 billion worth of shares in the company.

If you haven't guessed the company yet, don't be ashamed. Until three or four years ago, the name on everybody's lips was Yahoo! But then Nasdaq crashed and most Internet companies went broke. Having dot.com in a company's name was no longer in. It was out, stratospherically out.

Well, Internet is in again. Very in, and it's shaking up the business world all over again.

Haven't we met before?

Yahoo! is a good example. Five years ago, the old media companies were trembling in their corporate boots, fearing Internet publishing companies like Yahoo! would bite into their market share and uproot their hegemony. So they hastened to invest in Internet, suffered losses mounting to billions, pulled back and were pretty glad to watch the air escape the Internet bubble.

Yet Yahoo! and its online brethren are staging a comeback, which has been accelerating at a remarkable pace. Look at the figures.

Yahoo!, established in 1994, looks likely to report half a billion in profits a year, which is more than the New York Times and Wall Street Journal earn together. Ergo, the veteran media mammoths again find themselves facing new media companies growing at frightening speed.

Naturally, the situation today is completely different from that of 2000. Today there are just a handful of big companies in each of the Internet subsectors, after the startups burned up in takeoff. Most of the survivors have actual business plans. They know what works on Internet, and what doesn't, they know what will work and what will, apparently, never make it.

But the Internet bubble of 2000 and the Internet gala of 2004 have one thing in common. Share prices.

How much for this share?

Take the online auction site eBay, today the biggest online auction arena in the world. The company mediates between tens of millions of sellers and buyers each month. It is an extraordinary cash machine, too, grinding out $450 million net profit in 2003, lifting its cash in hand to $2.5 billion.

Even more eye-popping is the company's market cap. Its share price reached a record high at the start of 2004, lifting its market valuation to - hold on to your virtual hat - $50 billion. That is roughly the value of all the newspapers traded on Wall Street together.

Yahoo! isn't near its value of the great bubble days - not yet - but its valuation has also climbed to the unimaginable height of $28 billion. That is four times the valuation of the New York Times, and 10 percent more than that of Gannett Co., the biggest newspaper media company in the United States and publisher of USA Today, among others.

What may explain the restored enthusiasm for companies with business models like Yahoo!'s compared with companies like Gannett is the fact that Yahoo!, with 5,500 employees, nets about half what Gannett does with 53,000 workers.

Naturally, the climbing share price of giants like Yahoo! and eBay lifted market valuations of smaller dot.coms in their wake, conferring downright bizarre valuations on not a few.

Take Cnet, publisher of a popular online zine providing information and manuals on popular electronic devices. You may find it surprising, but its market value has reached $1.5 billion, though its revenues are a mere quarter-billion dollars a year and it isn't making any profits yet.

Well, you don't really have to track the Street to feel the comeback of Internet. Even in little Israel, it transpires, 40 percent of households have hooked up to fast Internet service, via ADSL or cables.

If you read the high-tech pages, you know dot.coms kept a low profile for the last couple of years, but a few months back they started to raise their periscopes and peer around again.

And in the last few weeks they garnered the courage to start releasing announcements about revenues and earnings, aiming to make headlines once again.

But if you're only opening your eyes to Internet now, if you're only just noticing its commercial potential and influence over every sphere of life, then keep in mind the capital market wasn't waiting for you. The celebration is raging and some of the party-goers are already dead drunk.