Recently, there have been a number of venture capitalists pouring money into high-profile ventures on the web - does this mean we are in danger of entering a new period of sustainable valuations?
Private equity firm Hellman & Friedman bought DoubleClick for £520 million; the co-founder of online credit card Egg helped to launch Zopa; and Simon Murdoch, founder of Amazon.co.uk, has unveiled a new online service called FriendsAbroad.
So, as VC money returns to the web, and even lastminute.com accepts a takeover bid, what can the industry do to prevent a possible new boom turning into another bust? (see Leader, p23)
SIMON MURDOCH - founder and chief executive officer, FriendsAbroad.com
Remember the quote about disruptive technology? "People tend to overestimate the short-term implications and underestimate the long-term impact." Well, in 1999/2000, everyone thought the internet would be transformational.
Companies piled cash into it and were disappointed it didn't live up to expectations fast. Now, it's back, with names like Amazon, eBay and Google doing really well, and the long-term impact is becoming clear.
We launched our free service, FriendsAbroad.com, in November and 60,000 users have signed up. For us, customer service is important. During the boom, people were fascinated with doing things fast and making a profit, and didn't always consider the customers. Now, those offering great service will succeed.
The second thing is for firms to pay by results. Cost-per-click offers a great advantage. In the boom, firms were charged on a CPM (cost-per-thousand) basis. Now, we are focused on finding ways to spend money where you only pay for results.
JAMES ALEXANDER - chief financial officer, Zopa
Internet penetration is in a different stage to how it was at the end of the 90s. We are in a different era - this will have legs.
From the VC side, I think there's a lot of money and some companies will get burned, but the brighter ones (falling into the category of once-bitten twice shy) will be incredibly cautious, and picky about what constitutes a good idea.
There are more experienced management teams around at the moment than there were first-time around.
The Information Technology revolution we are now living through is the fifth technology revolution since the Industrial Age saw the world adopt mechanisation and led to rapid development.
CHARLIE REDMAYNE - managing director, Mykindaplace.com
The venture capital coming back into the business is very different to that of 1999. The attitude then was that the web was going to revolutionise everything. "The internet will replace the high street in two years," was reminiscent of those types of conversations.
VC funding was based on that, but VC firms are coming back under different terms. Internet businesses that have surfaced in the last five years are well-managed, with proper business models, and performing well. Investment is based on the fact that there are good businesses that are underrated.
Combine this with online being the fastest-growing ad media and there's a good story as to why internet business is good for investors.
BOB WILLOTT - editor, New Media Agencies Financial Intelligence
There's a serious problem associated with venture capital and private-equity firms investing in this sector. Sub-stantial funding is washing over them and it's almost certain they're paying far more than the value of these firms, thus pushing up prices and raising expectations of buyers.
While I'm the first to agree that the digital sector has a lot of growth, it would be unwise to overestimate it. All venture capital and private-equity firms, which invest in the short term, are unlikely to want to hold shares for more than three years and will then wish to make substantial capital gain from selling them. That puts pressure on the firms they invest in, and it is not always in their best interest for strategic development.