Despite this month's rally on the Nasdaq, this year's IPO market has opened with a flop rather than a pop. Of three deals originally scheduled to come to market this week, the first priced at the bottom of an already-lowered price range and another cut its range and postponed its issuing date.

But, despite a slow start, it doesn't mean the overall IPO market is doomed for the rest of the year.

Peet's Coffee & Tea

( PEET) kicked off the year today. The popular San Francisco-based coffee retailer sold 3.3 million shares at $8, after dropping its price range to $8-$10 from $10-$12 Wednesday night. Biotech firm

Xenogen

(XGEN)

, which was slated to issue Friday, dropped its price Thursday to $9 from $10-$12 and postponed the offering until Jan. 31. The other deal slated for this week, dental technology company

Align

(ALGN) - Get Report

, is scheduled to come to market tomorrow.

Some market watchers were hoping this week's deals would make it to market without cutting their price ranges. But few were surprised by the revisions. Right now the balance of power in the IPO market is on the buy side and Peet's offering was not highly rated by analysts.

"Until deals start coming out and working, right now the strength is really in the buyers rather than the sellers," said James Dascoli of

McKinley Capital Partners

.

"Basically, it's not like it was six months ago, when the underwriters could set the terms. Now the buyers say 'No, we're not going to pay these prices,' " he added. "Until we can start getting some pops, the balance of powers isn't going to change."

Peet's offering was not expected to grab much attention, as the deal was issued under

W.R. Hambrecht's

Dutch auction system, where shares are awarded to the highest bidders rather than to the underwriters' biggest and most-favored customers. But that means gains are less exciting and institutional investors tend to avoid them. Meanwhile, Peet's faces a lot of competition in a crowded retailing space, from the likes of

Starbuck's

(SBUX) - Get Report

,

Green Mountain

(GMCR)

,

Gevalia

and

Millstone

. And the company was planning to use much of the capital raised through the IPO to pay off debt. Investors typically want to see the money raised go to new capital investments.

Still, it wasn't a bad first day for the roaster. Peet's shares closed up 17.2% to $9.38 on 3.62 million shares. Maybe it wasn't

theglobe.com

(TGLO)

, but a good first day does not a successful business make. Theglobe.com kicked off the Internet stock craze when its November 1998 IPO soared 606% on the first day. The stock now faces possible delisting.

Tomorrow's expected debut of Align will serve as the next immediate test of the IPO market. The company owns proprietary technology for invisible braces for adults -- technology some say looks very promising. But it has not yet turned a profit.

In this IPO market, not making money is back to being a dangerous proposition. After last year's IPO bubble bust, investors have stopped showering riches on start-ups with very little revenue and an untested business plan. In fact, December's success stories on the IPO market came from well-established businesses with profits. Indeed, only seven deals went to market, and several weaker companies were forced to pull their issues.

Align plans to raise $150 million with an issue of 10 million shares; the deal is being underwritten by

Deutsche Banc Alex. Brown

. Tonight, though, the shares were priced at $13, below the expected $14-$16 range.

And they're off. The games have just begun.