How Three Web Titans Survived the Bust

Online auction site eBay was a premier example. It fashioned a near-perfect Internet business model. It had virtually no cost of goods and little investment in infrastructure, required little management and, unique in the world of retail, had no concerns of the "turns" of its inventory. Its founder basically stumbled onto a model that was guaranteed to work as long as its network servers worked.

The hardest part of its business was attracting the first thousand sellers. After that, the viral effects of word-of-mouth marketing kicked in to attract thousands of buyers and sellers. Indeed, its customers morphed into a community that engendered remarkable loyalty, and buyers ultimately turned into vendors -- a truly unique phenomenon in the history of business.

In recent months, the community has turned hostile amid rapid fee increases. But there's no mistaking that this company has been a model survivor. Its shares initially fell as much as 65% from March 9, 2000, to a 2001 low. The stock, however, has been up as much as 90% from its price at the peak of the bubble, a rare feat among tech stocks. Despite a fallback this year, it's still up 35% from its 2000 peak.

Second, some survivors learned how to create perpetual revenue streams. Consider computer antivirus software maker Symantec(SYMC - Cramer's Take - Stockpickr). At one time down as much as 65% from its March 9, 2000, price to a late 2000 low, Symantec quickly recovered and is now up more than any other major tech stock born in that era -- nearly 110%. Hammered recently over a decision to spend heavily on an acquisition, Symantec has nonetheless ridden the wave of threats to personal computers from viruses and spam to pile up unrelenting earnings growth quarter after quarter. Its pioneering business model focused on annuity-like revenue from subscriptions to self-improving software proved brilliant, highlighted by a capacity to regularly push through price increases.