By 1999, Excite had merged with broadband services company @Home for $US6.7 billion, netting Kraus and his co-founders a paper fortune worth tens of millions each. But dreams of a lifetime of luxury pads and Learjets were not to be. Unable to convert internet traffic into revenue, Excite went bankrupt in late 2001 in the depths of the dotcom crash. These days, Kraus is still in Silicon Valley, near San Francisco, and he is back in business. And his latest internet startup, JotSpot (www.jot.com), has just been bought by the very company that succeeded where Excite failed - Google.

JotSpot is a web-based software company that provides collaborative web 2.0 tools such as wikis - a term made famous by the publicly editable online encyclopedia Wikipedia - to small and medium-sized businesses. Like YouTube.com, bought by Google for $US1.6 billion last month, Jotspot is an example of the new breed of successful startup: a company that has benefited from the falling cost of technology and the increasing sense of entrepreneurial spirit in Silicon Valley.

For Kraus, launching Jotspot was a case of going back to basics. Whereas Excite once employed 3000 people; JotSpot's headcount before it was bought was in double figures. Excite took $US3 million to get from idea to launch; JotSpot took $US100,000. But perhaps the biggest difference is this: these days there are proven business models that simply weren't there back in 1999. "Eight or nine years ago when the internet was really starting to get going, it was the Wild West," says Geoff Yang, a respected venture capitalist who invested in Excite. "There were no proven business models, they weren't proven entrepreneurs." Not so now. All over Silicon Valley, it seems, those entrepreneurs who survived the first dotcom boom and bust are dipping their toes back into the water and for many the hope is that a giant like Google or Yahoo will be waiting to snap them up.

"It's being fuelled by what may be an irrational belief that the appetite of Yahoo, Google and Microsoft is so strong that it will buy almost anything," says Kraus, speaking before the Google deal was signed. There are also fewer barriers to entry. Hardware is cheaper, there is more open-source software, and - in an odd coincidence for the former owner of Excite - you no longer have to spend a fortune on advertising your website because you can market yourself cheaply via search engines such as Google.

And that, as Kraus is always quick to say, is why Google succeeded where Excite failed. It brought its product, search-based advertising, to large numbers of small companies, not small numbers of big ones. Where Excite had tied up deals with large cable companies after its doomed @Home merger, Google went after the millions of small companies prepared to pay for search-based advertising and came up with the cost-per-click advertising model that has made billions. It's just 10 kilometres along the Bay freeway from where Jotspot has made its home to the famous Googleplex, so Kraus could be forgiven a note of nostalgia as he sold his company to the giant that Excite might have become.

In 1997, staff at Excite enjoyed health check-ups and a weekly barbecue and had their internal mail delivered by bicycle. If you want those kinds of perks now, you go to work for Google. "They embody every piece of the dotcom lifestyle from a company perspective," Kraus says. "Tons of free food, free massages, every service you can imagine from oil changes to dry-cleaning."

"It is a little bit of a time warp there," says Excite co-founder Ryan McIntyre, who works these days at Mobius Venture Capital. "[Google] still very much feels like a '99 type office, with the crazy colours and people riding around on bikes - but you know what? Google has the money to be that way, so God bless 'em for having that continue." After all, search engines, he says, are "still the lifeblood of the online economy". "It's unfortunate that Excite met its demise the way it did. But we were early, and a little before people figured out what the right business model was."

Yet another reason why it's cheaper to start a company these days, Kraus has noted, is easier access to global labour markets. That's exactly what another serial entrepreneur, Rakesh Mathur, is attempting to make the most of as he starts up yet another Silicon Valley company. Back in 1996, Mathur founded Junglee, a software company that made "virtual database" technology, offering access on one web page to information scattered across many resources.

As at Excite, the company lived the dotcom dream and even had its own "jungle" theme room in an attempt to keep employees creative and motivated. In 1998, it was sold to Amazon for $US200 million and Mathur soon moved on to other start-ups. Asked how much value Amazon derived from the deal, Mathur says that 30 per cent of Amazon's revenues now come from non-Amazon sources and that many Junglee employees still work at Amazon. He left, he says, because he prefers working with new businesses. Today Mathur is concentrating on Webaroo, which allows users to carry a "representative sample of the internet" on their hard drives for offline research. They are betting that computers' memory capacity will increase at a faster rate than the spread of wireless connectivity.

Another entrepreneur who looks back 10 years with fondness is Dave Samuel, founder of Spinner.com, an online radio station launched as thedj.com in April 1996 - at almost the same time Excite went to market. When we catch up with him, he's sitting at the very same ping-pong table that he once used as a meeting table at Spinner.com. Samuel remembers the "excitement and buzz" of being nominated Cool Site of the Day, then a well-known internet gong, just four days after Spinner was launched.

Samuel admits he was fortunate with Spinner, which he launched with the help of Josh Felser. The company was sold to AOL for $US320 million in 1999, before ever turning a profit. As it was to be years before anybody made money out of web radio, it seems likely that Spinner would have been in the dotcom graveyard come 2001. "We were very lucky with the way it worked out," Samuel says. "We could have taken Spinner public and I am extremely happy that we did not, because 90 per cent of the companies who went public in 1999-2000 barely exist or don't exist any more." Samuel, too, is back in business. In August he sold Grouper, a YouTube-style site for sharing video content, to media giant Sony for $US65 million.

Samuel admits his life has more balance these days. "Spinner was my sole focus - my top nine out of 10 priorities were all Spinner-related. Here I have a wife, two kids, two companies and other responsibilities." But for every entrepreneur who got lucky with the internet and has gone back into the market, there are others who had their fingers burned. For wine expert Peter Granoff, that meant his next venture would still be in San Francisco but outside the technology sphere.

In 1995, Granoff, one of America's best-known sommeliers, set up online wine retailer Virtual Vineyards with his brother-in-law, Robert Olson. The company seemed to have everything going for it: knowledge about the wine industry, early mover status in the e-commerce field and technology at the heart of the business. Despite legal impediments to shipping wine across state lines, things started off well. The company raised about $US30 million of venture capital between 1995 and 1999, during which time the net "started to explode into the mainstream consciousness", as Granoff puts it, and the company re-branded as Wine.com. But in 1999 the pair lost control of the operation as $US100 million came pouring in from various venture capital firms. Wine.com was one of many companies that spent vast amounts on marketing its patch of dotcom turf - the perceived wisdom among venture capitalist investors at the time. "It had an air of unreality to it," Granoff says. "My brother-in-law and I would have these conversations where we would kind of look at each other and say 'this is goofy'. On some level your gut just says, 'This is unreal, this can't go on.'

"And some time before the meltdown started in 2000, it went through this transition. It seemed to have ceased to have anything to do with healthy businesses for the long haul and was all about, 'How much money can I bail out here with?' " The disastrous move, Granoff says, was when Wine.com merged with debt-laden rival Wineshopper.com in August 2000.

"My biggest frustration," he says, "was if we had been allowed to grow at a little saner pace it could have been a very healthy business. It might not have been a venture-capital-scale healthy business but it certainly would have justified itself and then turned a profit." These days, Granoff has returned to his roots in wine retailing but in a bricks-and-mortar business, the Ferry Plaza Wine Merchant & Wine Bar (www.fpwm.com), where he says he still gets dotcommers among his customers. "San Francisco was very, very hard hit on meltdown," he says. "The economy [in the city] seems to have come back and solidified: it's not crazy like it was, it just seems to be reasonably healthy. And there are certainly dotcom businesses that are actually doing well, and they're part of the fabric of the Bay Area economy - they don't stick out [the way they used to]."

But even Granoff can't ignore the internet for long. "We're getting ready to launch the e-commerce part of this business," he says. "We've taken our time and we're determined to integrate it as closely as we can with the experience the customer has when they're in our shop." Some dotcom pioneers have followed different paths and left Silicon Valley altogether. Neil Peretz, who co-founded mobile email company PocketScience (www.pocketscience.com) in 1995, is researching online cross-border disputes at the respected Catholic University in Leuven, Belgium, while training to be a lawyer. But Peretz does not look wistfully at Google - he looks at BlackBerry.

"When I started the company, we'd go meet [executives] and they'd say: 'Mobile email? Why would I want that? I'll just have my secretary fax it to me.' They're all tied to their BlackBerry these days." PocketScience failed to grasp the concept of wireless email that has made BlackBerry so successful. Its email devices still require its users to dial into an analog US phone number in order to send and receive email messages. PocketScience was ultimately bought by an Australian spin-off company that Peretz helped set up. But he says the biggest lesson he learned from the bubble was the importance of strong personal relationships and having people in business you can trust.

He retains a certain cynicism about the new boom. "This dotcom second wave is a lot like the first one dusted off again. Is it a podcast or is it just that we put your MP3 files on your website? Is it a blog or are you just making a web page with Geocities? Even the social networking websites, MySpace and Friendster go back in time to '97, '98 and PlanetAll and Six Degrees." Like Junglee, PocketScience used themed rooms to try to inspire creativity in its employees. In 1998, employees would wear togas in a Roman room, perhaps designed for dotcom empire-building; or as if to prove that the dotcom bubble really was the Wild West, there was a room designed around the OK Corral.

When I ask Peretz if he has a toga in his wardrobe these days, his answer is "probably". "San Francisco tends to wear off on people and pervades their wardrobe - so I'll have to find some festive gatherings to break out all the stuff that I've picked up from having lived in San Francisco. It doesn't really come up as much in Belgium for some reason." Bill Lessard shot to internet fame with his book NetSlaves, about the reality of living in the dotcom boom. Now a New York PR consultant, he remembers that for most people the bursting bubble hit hard. "These start-ups were almost like psychological experiments, as if somebody was sitting behind a glass wall, someplace, saying: 'I wonder what would happen if we kept people here 18 hours a day and made them never see their family and friends?' It was totally crazy. But this is what happens when you tell a lot of people that they can all be billionaires.

"There was no division, in people's minds at least, between the CEO and the rank and file. Even if you were the guy who was plugging in the servers, you still thought of yourself as an entrepreneur. We were all entrepreneurs. But then the realisation for me, and for others who became disgruntled technology workers, was that that was really not the case. "In the final analysis it was the founders of the companies and the investors who were the ones who were making the money. Your stock options were just the carrot - they were worthless at the end of the day."

After going freelance to write his book, Lessard turned to building websites to pay his way. Suddenly, there was no work at all. "It was so bad that I wound up working in catering, for the better part of a year, working with a bunch of 20-year-olds who are just there to make enough money to pay the cell phone bill." But for all the down times, Lessard still takes pride in his role in the dotcom boom. "We were a generation that had been completely written off by the boomers: 'They're just a bunch of slackers, they're never going to amount to anything.' And what did we do? We built the internet in five years."

And that's something that the NetSlaves and the CEOs have in common. Asked what the high point of building Excite was, Kraus is adamant that it was the uses for the technology that gave him ultimate satisfaction. "It's the international plane trip where your seat mate tells you a story of how Excite found them the information on a loved one's illness," he says. "You were affecting people's lives on a broad scale."