No Bust in Internet Stock Boom

Still, Yahoo!'s shares trade at almost 45 times forward earnings and command a price-to-earnings-to-growth ratio (PEG) of 2.3. Investors expect heady growth from the company. In 2008, Yang will have to show them how he plans to deliver.

Google

Google hopes to extend its winning ways in 2008. While the search giant's competitors seem unable to stop it -- its share of the search market is up to 65% as of October, according to research firm HitWise -- investors will be wise to mull the scope of the company's ambitions.

In November alone, the company announced it would bid the minimum $4.6 billion required to participate in the FCC's upcoming auction for wireless spectrum as well as try to discover a form of energy more efficient than coal.

The company has also announced a new mobile operating system, called Android. During the summer, it pioneered a new video advertising system for its YouTube video sharing service.

These initiatives are on top of Google's existing projects to enter radio, satellite TV, print, and display advertising. And if history is any indication, 2008 will likely bring plenty of bold new directions as well.

Investors have come to expect a lot from Google. Shares gained 50% during 2007 and currently trade at $700.74. But the median price target for the stock is $750, indicating that most Wall Street analysts expect further increases. And with a PEG of 1.3, the company will have to grow earnings 35% a year for the next five years to live up to those expectations.