Ebay leads online revival as internet hits refresh button ; Wall Street is now starting to believe that the last big thing could also turn out to be the next big thing, writes Richard Waters

It all looks so Last Century. EBay, the internet flea-market, isonce again worth as much as Sears, The Gap and Federated DepartmentStores combined.

Online travel service Expedia is worth more than the six biggestUS airlines put together. And Amazon.com stock is trading at fourtimes Barnes & Noble and Borders.

The internet's boom-time stock prices are back, as a handful ofsurvivors has emerged from the wreckage. Only this time around, theweb has become a very different place to do business.

Real sales and earnings, not eyeballs or click-through rates, arenow the main yardsticks for stock prices - even if those measureshave been stretched almost to the point of incredulity.

In some ways, things seem to have changed little since thebubble. Share prices are still based on a belief that the infant webwill consume vast swathes of the retail, travel and mediaindustries.

Take USA Interactive, the corporate vehicle of media entrepreneurMr Barry Diller, who this week pulled off the latest in a string ofweb deals with an agreement to acquire financial services siteLendingTree.

Through Expedia and Hotels.com, Mr Diller is already the world'sbiggest online travel agent. Yet he claims this is just thebeginning: with less than 15 per cent of US travel sales - inEurope, only 1 per cent - conducted online, there is plenty of roomto grow.

Some time over the next decade, Americans will be booking morethan half of their personal travel online, industry forecasters say.The current level of share prices already treats much of this growthas a certainty.

EBay's shares have now touched a level they topped only during adizzy two-week spell at the peak of the dotcom bubble.

Among other battered stocks to see an impressive, though lesser,rise are Yahoo!, which has climbed threefold from its low of lastautumn, and Amazon.com, which is up fivefold since its nadir in2001. Internet stocks are the only corner of the tech sector to havegone up over the past year, according to Merrill Lynch.

Three years on, the few remaining dotcoms have at least notchedup a track record that makes the grand promises of the bubble seem alittle less pie-in-the-sky.

EBay has lifted its revenues from around $200 million (E174million) to $1.2 billion, while its profits have jumped from $10million to $250 million.

Amazon, though yet to turn a full-year profit, has more thandoubled revenues and is now edging into the black.

At 70-80 times expected earnings this year, the internetcompanies are still off the charts compared with traditional stocks -although at least they are being compared on the same scale.

But to keep growing at exponential rates the small band ofinternet survivors will have to master new skills.

Three that have bedevilled many traditional off-line companies inthe past stand out.

One is acquisitions. The dotcoms have started to mop up smallerrivals in a bid to consolidate their foothold and extend their reachinto new markets. Besides Mr Diller's acquisition spree, Yahoo! hasbought internet search and online recruitment companies, while eBaybought the biggest online payments company.

A second new skill, as they move into new markets, involves cross-selling to existing customers. Part of Mr Diller's promise is thathe can sell hotel rooms and sports tickets to people who come toExpedia to buy airline seats - something that sounds easy but whichfew broad-based consumer companies have managed.

Third, and perhaps most difficult , they must now conquer theworld.

Though far from mature, the US internet market is slowing: thebest chance to keep the exponential expansion going is by exportingAmerica's dotcom successes.

"For Hotels.com and Expedia, the biggest growth drivers areoverseas," says Peter Mr Mirsky, an analyst at Fahnestock.

EBay's international revenues are soaring, while Yahoo! plans toreproduce its US businesses in the largest overseas markets.

It may be that the rest of the world's consumers are not as readyas Americans to rush to the net. But Wall Street's "buy" signs arealready signalling that the next generation of multinationals isready to reach out to the world.