No Bust in Internet Stock Boom

Shares were driven higher after the company delivered second-quarter results and said that it would pull back the reins on its investments, a move analysts expect will help boost the company's closely watched operating margins.

Still, 2008 promises to bring some of the company's more high-profile products further into the spotlight. In November, Amazon launched Kindle, a digital book reader with a broadband connection.

In addition, early 2008 should bring holiday sales results. And the company's push into computing services through its EC2 and S3 services -- which sell computing and storage to business -- is expected to get even more traction in the year ahead.

Trading at 55 times forward earnings and with a PEG of 3.5, it's tough to make the case that now is the time for investors to get into the stock.

IAC/InterActive

Come 2008, IAC will no longer be the far-flung conglomerate investors long knew it as. In November, the company announced that it would split into five different new entities, with the parent companies retaining the group's Internet businesses. This includes high-profile brands like the Ask.com search engine, the Citysearch local listings directory, and the Evite event planning service.

The move signals that IAC intends to align its fortunes with what it sees as growing opportunities in the booming online ad market. Of course, other players see that opportunity as well -- and IAC should prepare for plenty of competition there.

Shares currently trade at about 15 times forward earnings. That reflects the weight of IAC's slower-growth businesses, such as the Home Shopping Network, which accounts for about half of its revenue. The company's PEG is 1.26.