No Bust in Internet Stock Boom

eBay

eBay's auction business dominated headlines in 2007. But expect new stars, including its PayPal payment business and growing online advertising business, to shine brightly in 2008.

For now, shares of eBay will enter the new year up about 10% -- on par with the broader Nasdaq index. The stock had been soaring, up almost 35% as recently as October, until concerns surfaced that user growth and activity at the company's auction business were slowing following the company's third-quarter earnings results.

While eBay struggles to boost activity in auctions, it will try to find new opportunities for fast growth in 2008. To that end, it launched the Kijiji, an online classified site, in the U.S. in 2007.

Kijiji is an attempt by the company to expand into the growing online ad market. Growth at PayPal also continues at a blistering pace, and as revenue from the service continues to grow, eBay will attempt to take advantage by adding more features to the service.

Trading at about 20 times forward earnings with a PEG of 1.23, some eBay boosters argue that the company should be considered a value stock by Internet standards.

Amazon

It's tough to imagine Amazon(AMZN Quote) repeating its 2007 performance in 2008. Shares of the Web retailer gained about 130% during the year, making it the best performing major U.S. Internet stock by a wide margin.