The Dow Jones industrials are at record highs. Google is buying YouTube for an eye-catching $1.65 billion. Americans are still spending even though the housing market is on ice. And the superrich are once again pouring megabillions into risky hedge funds.

Coming up: Yahoo reportedly wants to buy Facebook for $1 billion.

Good grief. Have we learned nothing from the late '90s tech bubble? Back then, a frenzy for Internet companies sent stock prices through the roof only to see them crash back down and spark a recession.

The short answer: Mostly yes, we do know better, analysts say. While there are some similarities between now and 1999, a lot has changed as well.

asap considers the evidence:

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The Internet is more mature. The content is richer, more people have broadband, and advertisers have finally caught on.

"There's enough absolute traffic on the Internet to make that a huge domain that advertisers want to access," says Jerome Engel, executive director of the Lester Center for Entrepreneurship and Innovation at the University of California, Berkeley.

Another big change from 1999 is that media markets — whether radio, newspapers or even television — have fragmented, he adds. "As mainstream media loses control over the advertising dollar, it migrates to other places."

Specifically, it's going to the "vertical" or niche markets that can be reached on video-sharing and social-networking sites, he says.

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YouTube really is something different. No, it isn't making money yet and maybe it was overvalued, but it is fundamentally changing how we consume entertainment, says Peter Fader, a marketing professor at the Wharton School of the University of Pennsylvania.

"YouTube has made an impact, not just on the technology sector, but also on the cultural fabric of America in a way that very few companies of any kind have managed to achieve," he says. Even people who don't check their e-mail are using YouTube, Fader says.

He is less bullish about social-networking sites like MySpace and Facebook, which he says serve very small niches.

"A lot of normal people like you and me don't use MySpace," he says, "whereas everybody has reason to go to YouTube."

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If there is a bubble, it is inflating a relatively small sector of companies.

"Back in the real bubble days, it affected absolutely everything," Fader says. "Any property with a dot-com, with a technology feel to it was affected by that exuberance. Today, any commerce-oriented property — from an Amazon on down — they're really easy to valuate.

"I think a lot of these community-oriented sites are kind of the last frontier. It's the Wild West for this kind of exuberance."

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Once bitten, twice shy. This time around, "there's a lot more open discussion of the caveats involved in these deals," says Allen Weiss, a marketing professor at the Marshall School of Business at the University of Southern California. Pundits are already asking how Google will deal with piracy and licensing issues on YouTube, he points out.

He adds: "I think there's a lot more honesty about the business model," namely that there needs to be one.

"In 1999-2000, people said, 'What business model? Nobody cares about that,'" he says. Now, it's not enough to have "eyeballs." There needs to be some plan to monetize them, via the age-old concept of advertising.

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Even the exuberance is less exuberant. The U.S. economy as a whole is much more fragile now in the late '90s, given elevated housing prices and record debt levels.

"In the '90s, we were in a completely different world," Weiss says. "The economy was really good; there was no war. There was this whole sense that people could throw their money into the stock market."

Which is to say, times have changed.

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ON THE OTHER HAND ...

Risks remain. Fundamentally, YouTube needs to make money to justify its enormous price tag.

And if too many companies start splashing out for these user-content-driven sites, "before you know it you can get a bubble," Weiss says. "People will start convincing themselves that it makes no difference how many of these sites are out there, even though there's no business model and there's not enough inventory or enough advertising for these things."

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Stephanie Hoo is asap's business writer.

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