Internet is back, but with provisos

ATHENS: The market for Internet companies to go public is back, the managing director of Goldman Sachs' high-tech group said on Sunday, but only with provisos and with private equity firms increasingly calling the shots.

Lawrence Calcano told a technology conference in Athens that U.S. Internet companies with strong online advertising business models were succeeding, but that the climate did not mean a return to the hype of the Internet bubble of 2000.

"Is the industry back? Yes and no -- no because it will not be the case this time that the rising tide will raise all boats," Calcano said.

Top Internet companies are trading at around 40 times future price-to-earnings ratios, compared with as much as 300 times for companies like Yahoo at their peak.

"The bars to go public are very high now," he said. "Private equity players are creating a new set of rules."

But he said today's more sober market was a healthy one, with great potential for new Internet companies with clear online advertising plans.

Only around 5 percent of advertising budgets are currently spent on Internet ads, he said, compared with 20 percent of consumers' time spent online.