Zillow IPO soars - high demand for tech stocks

Investors again pay big for dot-com stocks

Some analysts fear investors who have forgotten history are doomed to repeat it when it comes to Internet IPOs.

• 
  By Paul Sakuma, AP
  Facebook CEO Mark Zuckerberg. Investors are eagerly anticipating a Facebook IPO.

Just 11 years after the dot-com bust, one of the biggest periods of wealth destruction ever on Wall Street, investors are paying rich prices for newly minted Internet stocks again.

The renewed furor was clear Wednesday, when real estate website Zillow jumped 79% in its first day of trading. That's the latest sign of investors' growing eagerness to get a piece of new Internet companies, including:

•Escalating valuations for recent IPOs. Investors are paying $135 for each $1 in profit earned by home rental service HomeAway, and more than $1,000 for each $1 in profit at professional networking service LinkedIn, says Standard & Poor's Capital IQ. In Zillow's case, the company isn't even turning a profit.More..