Updated from 3:35 p.m. EST

With a $54 billion hostile bid by Comcast ( CMSA) for Disney ( DIS) now on the table, 2004 is shaping up to be the biggest year for mergers and acquisitions since the peak of the Internet bubble.

The bounty was being felt in brokerage shares, which were almost uniformly higher Wednesday.

So far in 2004, proposed buyouts are valued at $165 billion, the second-highest level on record this early in a year, according to Thomson Financial. The amount was greater only in 2000, when it totaled $314 billion by Feb. 11. Even in the first six weeks of 1999, deals were valued at just $159 billion.

After a few of years of cutting costs, businesses have gained the confidence to look outward. "Low interest rates, higher equity prices, hefty cash levels and the expectation of better corporate profits are the ingredients for increased M&A activity," said Richard Peterson, an analyst at Thomson Financial.

While the recent deal flurry is reminiscent of the blizzard in 2000, there are reasons to believe it's different this time around. For one thing, the companies involved have been profitable or shown revenue growth.

In its latest quarter, cable operator Comcast earned $383 million, or 17 cents a share, compared with a loss of $51 million, or 3 cents, a year ago. Analysts were expecting 3 cents, according to First Call. Disney had quarterly net income of $688 million, or 33 cents a share, vs. $36 million, or 2 cents, in the year-ago period. The consensus called for 23 cents, based on First Call estimates.

"In the bubble, small companies with highflying share prices, such as AOL, tried to take advantage of that," said Ken Marlin, president of Marlin & Associates, an investment bank focused on media and technology. "The strategy was to create a high-growth Internet stock. It was a flawed assumption."

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