Dot-coms a hot domain

May 2004

Dot-coms are back.

Yahoo, EBay and other Internet firms have been some of the strongest-performing Bay Area companies during the past year, recording impressive gains in both revenue and market value.

"The sector is doing very well,'' said Safa Rashtchy, an analyst for Piper Jaffray & Co., adding that Internet firms have benefited from both the general economic recovery and the growing use of Internet sites. "It is certainly one of the hottest sectors."

Nationwide, consumer Internet services stocks surged 80 percent during the 12 months that ended March 31. Locally, the combined market value of six Bay Area Internet companies in The Chronicle 200 nearly doubled during that span.

The fundamentals were equally strong. Local dot-coms' revenue jumped by more than two-thirds. Profit grew even faster as several money-losing companies slashed their losses and already profitable firms like EBay boosted their net earnings.