Tech Trends to Watch in 2008

Editor's note: This is Part 1 or a two-part series. Check back next week for Part 2.

Fact: Over the last 12 months, TheStreet.com's Internet index of 21 leading technology stocks has risen 16%, significantly outperforming the 4% appreciation for the Dow Jones Total Market Index.

Fact: The three hottest stocks in this Internet index have been: Amazon AMZN, up 146%, Research In MotionRIMM, up 141%, and VeriSign VRSN, up 56% for the last 12 months.

Fact: Believe it or not -- Internet stocks can decrease in price. The three worst performing stocks in the index, MonsterMNST, AvocentAVCT and Interactive IACI, actually lost 23% of their value during the same period.

What explains the difference?

If you believe McKinsey's just-published article in its quarterly, "Eight business technology trends to watch," the answer is simple. Winning companies don't just use technology; they create new ways of doing business.

In the spirit of stirring up dialog about which are the best stocks for 2008, here are the eight trends as outlined in the McKinsey article and my comments on near-term valuations for Internet stocks:

The first four trends fall under the theme of managing relationships.

1) Distributing co-creation. According to McKinsey, the Internet and related technologies can give companies radical new ways to harvest the talents of innovators working outside corporate boundaries. This trend refers to the way companies co-create with partners and strive to be more productive.