Online ad spending is on the rise and inventories are growing tighter. Click-through rates on online ads are improving. At-home and at-work broadband connections continue to proliferate, and rich media ads are becoming more complex and effective. Even highly hyped IPOs are back in the news with Google’s foray into the world of publicly traded companies. The excitement is once again palpable, from publishers to advertisers to the general public. Is the Internet boom back, and if so, should we be ebullient or filled with trepidation?

It would be very hard to argue that the upturn is not welcome – after such a prolonged funk everyone is excited to see this sector of the economy spring back to life. So far, the tenor is appropriately positive but restrained. The fear is that we will once again return to the days of “irrational exuberance,” which cost so many people so much money. I would like to think that the lessons of the late 1990’s could not be forgotten so quickly, but history has proved time and again that collective memories can be frightfully short.

There are many factors at play, and it is impossible to predict the future, but there are several trends that will influence how the Internet rebound will play out. For instance, cottage industries seem to be really taking off. During the boom, many believed that the Web would enable the little guy to make a living peddling his or her wares to the worldwide market. Unfortunately, there were a limited number of success stories in this area. It turned out that reaching the right people at the right time, and in the appropriate context, was not as easy as initially presumed.

Today, there are a number of online venues that help to aggregate small buyers and sellers, facilitate peer-to-peer transactions, and provide all necessary e-commerce-related infrastructure. These aggregators are big enough to attract a critical mass of buyers and sellers and to provide robust capabilities at a minimal marginal cost, thanks to significant economies of scale. This has in turn fueled the proliferation of cottage industries, from eBay merchants to soccer moms who sell homemade jewelry and clothing that they make as a hobby in their spare time.

Another clear trend is a greater focus on bottom line impact than we saw during the 90’s boom. The myth that profits are unimportant as long as revenue continues to grow has been irrevocably debunked. Investors have returned to the fundamentals – they want a company to prove that it can build a sustainable, profitable business in a reasonable amount of time. People are no longer willing to pump money into just any good idea. The idea must present a cost structure and demand curve that make it economically feasible. Just how this primary economic criterion disappeared in the first place is a mystery to anyone with any kind of business sense.

Advertisers are also taking advantage of the accountability of Web and e-mailing advertising to determine actual ROI – and they are attempting to strengthen quantifiable ROI measures for traditional media as well. Thus far, this has been a boon to the interactive advertising industry as bottom line results can, for the most part, be quantitatively tied to online ad campaigns much better than they can be through traditional channels.

Overall, e-business appears to be back on track. The sector continues to strengthen, and Internet penetration continues to improve across the globe, albeit slower than in the heady days of the first boom. Companies, investors, and individuals all seem to have pared down their expectations while concomitantly improving their measures of success. Although in many ways, it may appear that we are falling into the follies of our past, it is highly unlikely that were are doomed to repeat those same excesses. As a collective, it seems that the most important lessons have stuck (for once). Let’s just hope that the vast majority of individuals also have sharp memories.