Mr. Kraus exemplifies the second reason I believe we are not in a bubble: this time, the financiers aren't driving. Instead, the entrepreneurs and geeks -- often one and the same -- are. The lessons of Web 1.0 are never far from their minds, and the desire to create something cool that might foster some good in the world is often equally paramount with the desire to make money. The culture of Web 2.0 is, in fact, decidedly missionary -- from the communitarian ethos of Craigslist to Google's informal motto, "don't be evil."

Ah, yes, Google. That brings us to the third reason we are not in a bubble: vastly improved search technologies. Recall that the demise of Web 1.0 was predicated in large part on the collapse of the Internet advertising business -- people were spending millions buying billboard-like ads that, it turns out, nobody was paying attention to.

But effective search engines -- and what they enabled -- changed all that. Right as the bubble burst, the Internet became a mainstream medium -- a majority of Americans were now online. At about the same time, Google turned its first profit, as did Overture, a similar company now owned by Yahoo. These two companies made money by reinventing advertising. Using their services, advertisers paid only when people actually clicked on their ads, and it turned out, millions did just that -- once the ads were matched to searches and therefore actually useful.

Search has provided the business models for countless companies, which use search to find new customers (eBay and Amazon are two of Google's largest advertisers) or which run Google or Yahoo's advertising networks on their own sites (a process called syndication). In fact, syndication has become the de facto business model of many start-ups: if you build a new service that garners a decent audience, syndication can provide enough revenue to give you time to refine your services and find your true business model.

Which leads me to the final reason I believe we are not in a bubble: the relative lack of public offerings. Most companies this time around are taking the path of acquisition, finding homes at large, stable and profitable companies like Yahoo, Google, News Corporation or Barry Diller's InterActiveCorp. The era of the hot Net I.P.O. is over, and good riddance.

So sure, there are too many start-ups, and sure, some venture capitalists are trying to get in on as many as they can. In the meantime, far more companies are starting that just might change the world, or at least interesting parts of it, and thanks to the lessons of the past, we now have an ecosystem that may enable them to make a serious go of it.

Op-Ed Contributor John Battelle, a co-producer of the Web 2.0 conference, is the author of "The Search: How Google and Its Rivals Reinvented Business and Transformed Our Culture."

Editors' Note: November 29, 2005, Tuesday An Op-Ed article on Nov. 18 about the future of Internet companies should have included additional information about the author, John Battelle. The New York Times Company has made an investment of no more than 5 percent in Mr. Battelle's company, Federated Media Publishing.