Maybe the Internet advertising picture isn't all that gloomy after all.

Funding among the once-lush Internet content companies has dried up, after months of stock-market swooning and the recent failure of some high-profile online companies. The earnings season sparked worries that outfits depending on Internet advertising could report shortfalls that would drive another Net stock rout.

But big names like

Yahoo!

(YHOO)

and

DoubleClick

(DCLK)

have posted rock-solid numbers, and even second-tier names such as

About.com

(BOUT) - Get Report

are spreading good cheer with their results. So perhaps the tide is turning for some of these beaten-down names.

About.com's CEO Scott Kurnit certainly thinks so. He told investors listening to its second-quarter earnings call Wednesday that About expects to report an operating profit by the first quarter next year, thanks to increased advertising spending on the Internet portal. That means the company has moved up its forecast of profitability by a quarter. "Companies that don't make money are not real businesses, and I'm really excited about becoming one at last," said Kurnit.

Excluding some noncash charges, About.com lost 33 cents a share in the quarter, narrower than the 39-cent loss forecast by

First Call/Thomson Financial

. About's net loss narrowed to $18.9 million, or $1.06 a share. The day after About's bullish announcement, the stock jumped 16%.

"The numbers are very good," says Jeffrey Fieler, a consumer Internet analyst at

Bear Stearns

in New York. "I believe that the business model to become cash-flow positive will work." (Bear Stearns helped underwrite About.com's IPO in March 1999, but currently has no rating on the company's stock.)

About.com also said the number of advertisers on its network of 700 content-specific Web sites (covering anything from botany to waste management) increased to more than 1,800 from 620, thanks to the launch of Sprinks, a pay-per-click advertising service that enables online advertisers to bid for ad space. Sprinks has attracted more than 1,000 advertisers since its launch six weeks ago, the company said.

About.com's content-specific Web sites offer a wide selection of targeted audiences -- an attractive prospect for advertisers, believes Bear Stearns' Fieler. "The Internet advertising market is becoming more competitive, so if an advertiser knows the demographic they are getting, it resonates with them and it means that they can get higher conversion rates," he says. "Advertisers will pay a higher price to be a part of that."

Also taking Internet advertising more seriously are bricks-and-mortar companies like

Coca-Cola

(KO) - Get Report

and

Procter & Gamble

(PG) - Get Report

, says Fieler. Web providers that can show they have a compelling offer for these companies will benefit as offline advertisers move to the Internet, he says.

"When a company like Procter & Gamble, with an annual advertising budget of $4 billion, says they are going online it shows the value of online advertising," says Fieler. "It says this is a good marketplace for these companies to spend their money." A major television advertiser for decades, Procter & Gamble reportedly wants to focus more on reaching specific consumer groups via direct mail, the Internet and other alternatives.

Indeed, Internet-only companies are making the most of the opportunity to haul in more advertising revenue from offline advertisers.

In a recent research note, analyst Michael Graham at

Roberston Stephens

wrote that About.com receives just over half of its revenue from dot-coms, and that it has shifted its focus to established companies with greater financial stability. Revenue growth from advertising is traditionally slow during the summer, he added, noting that it would be wrong to interpret the slowdown as industry weakness.