Overpriced internet stocks

Over-valued internet company shares
Unrealistic expectations of internet profits
Internet-based companies are now the darlings of stock markets with, in many cases, enormous valuation but little or no profits. Quasi-economic arguments are used to justify hyperbolic stock prices of these firms. Although there is little serious financial justification, analysts point to concepts such as price-to-eyeball ratios to remain optimistic about their future profitability. Market analysts and investors consider conventional measures of valuation such as P/E ratio and growth rates as irrelevant.
At well over $100 a share, Yahoo!, the Internet's most popular directory service, is worth more than $6 billion in market capitalization with revenues of less than a few hundred million dollars. Other Internet companies such as Amazon.com, Excite and Lycos have equally extraordinary valuations.
1. With increased competition, rosy predictions based on future dominance and profits may never be realized for Internet firms.

2. Unless a technology is proven to be so unique as to guarantee monopolization, the digital marketplace lowers barriers to entry until competition renders one's high expectation of future profits unattainable.

(E) Emanations of other problems