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Will Google IPO bring back the bubble?

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Some time in the next few months, Google, the Internet search company, is expected to "go public," or launch an initial public offering (IPO).

Depending on how Google's stock performs - and its effect on other Internet-related stocks - analysts say it may demonstrate whether the current rebound in high-tech stocks and technology mutual funds can be sustained, or whether this is another technology "bubble" like the one that burst so loudly in March 2000.

Right now, the rebound seems very real. Over the past year or so, prices of many Internet and other technology stocks have soared, more than doubling in some cases. These gains have meant big returns for technology funds, especially those that focus on the Internet. The WWW Internet Fund, for example, gained more than 41 percent in 2003, according to Morningstar Inc. And, after losing more than 79 and 54 percent in 2000 and 2001, respectively, the Jacobs Internet Fund advanced more than 100 percent last year.

But the gains were achieved because stocks in these funds rose from very depressed levels.

"A lot of companies were beaten down to a dollar or two dollars a share" after March 2000, says Richard Peterson, an analyst at Thomson Financial. "A couple years ago, Lucent was trading under $1 a share. Now, it's trading over $4 a share. Juniper Networks and others were trading at a fraction of their all-time highs. If you go from $200 a share down to $5, then go from $5 up to $10, that translates into a 100 percent gain."

So, while these stocks have made nice recoveries - albeit off low bases - investors are watching Google's stock offering closely. The Times (London) last month reported that the IPO would not happen this spring. But "nothing has changed" in the company's approach toward going public, says Google spokeswoman Cindy McCaffrey.

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