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bubble.dots may burst but tech stocks will stay steady

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Bridging the IT gap between rising business demands and ageing tools

It seems there's almost a unanimous scream now from financial pundits on a pile of well known broadsheets about the dangers of investing in dot.com ventures, many of which appear to be wildly overvalued. But while many of these bubble.coms may float to the surface of public perception and then go pop, there's little likelihood that tech stocks will suffer and are likely to gain from the Internet explosion. While the bubble.dot companies are surfing on the huge waves of the Internet explosion and may crash on some pebble-strewn beaches, there are a number of large and well established technology firms which cannot lose, however badly the more public bubble.coms do. These firms, amongst which we can number at the infrastructure end Cisco, Nortel, Intel are quietly (and sometimes not so quietly) preparing themselves for the growth in Internet business. Unlike some of the bubble.coms, these people have real businesses and real products and services, and are akin to the plumbers, the carpenters, and the grocers that we all need for a well organised life. In a similar way, suppliers of server products and services, including firms like IBM, Compaq, HP and Dell are all going to do well out of the Internet, whatever the fate of the bubble.coms. The creation of large server farms all around the world is intended to support the level of business to business and other transactions that will take place over the Web. These firms, in turn, are supplied by a large base of component manufacturers who make the hard drives, graphics cards, monitors, memory firms and the rest, all of which are necessities for the Internet revolution. And there's also a myriad of other companies, including semiconductor companies like Intel (again), AMD, National Semiconductors and a host of others who will also do well out of the Web explosion simply because all of the above won't run without those bits of pieces. Big business seems worried by the bubble.coms, simply because of the large amount of money, albeit much of it on paper, to leverage other firms in what's become a crazy paperchase of the global stock market. Although no one is entirely clear which of the bubble.coms don't burst and which business models will and won't work, it's certain that a percentage, even if it's only a small percentage, will do very well. And the companies that underpin those are clearly going to rake in the Net benefits. ®

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