Internet sensation Facebook is leading a new online gold rush but the mind-boggling millions being pumped into the sector have raised fears of another IT boom and bust. Jez Davison asks Teesside firms whether history will repeat itself.

CRYSTAL ball-gazing can be a dangerous pastime but Teesside's money men were spookily correct in predicting the end of the dot.com boom almost 11 years ago.

Early in 2000, stockbrokers James Lindsley and Andrew Priestley warned the hi-tech bubble was about to burst. It had dawned on them that there was little substance behind the hyper-inflated valuations placed on fledgling internet firms.

Their words turned out to be prophetically true.

Just weeks later, the industry crashed almost overnight as cash-hungry investors got their fingers badly burnt.

A decade later though, a new wave of internet investors are making megabucks from the next online boom.

The popularity of Facebook has seen founder Mark Zuckerberg’s wealth leap to an estimated $14bn (£8.8bn).

Meanwhile former Google CEO Eric Schmidt is set for a $335m (£210m) windfall after selling more than half a million shares in the search engine giant.

Business networking site Linked In is reportedly worth more than $2bn (£1.25bn), while Twitter’s $200m (£128m) fundraising exercise before Christmas has sparked talk of a possible multi-billion pound flotation.

The mind-bending valuations attached to these ventures have created an IT bubble that appears identical to the one which went bang in the early naughties.

But Teesside firms say there are subtle differences between the two eras.

Jonathan Wheatley, managing director of Stokesley IT firm MC Ware, says the companies powering today’s e-revolution have more underlying value than the dot.com failures of a decade ago.

He said: “Companies like You Tube and Facebook have a massive following of visitors and advertisers.

“I don’t think people will be burnt quite as easily as before.

“A lot of the companies that fell into trouble ten years ago didn’t manage to create a solid customer base.”

Facebook’s growing army of followers has laid the foundation for its success.

Half of its 500m-plus users check in to the site each day and once they get there they are hooked.

Each month they spend more than 700 billion minutes on the site and share in excess of 30 billion pieces of content including videos, photos and blogs - suggesting the company will be around for some while yet.

On Teesside, IT firms are also bedding in for the long haul.

Award-winning Stockton technology firm Onyx Group has spread its tentacles around the UK by building a national network of data centres and workplace recovery facilities.

Meanwhile Stockton IT services firm, Cornerstone Business Solutions, has built a client base of more than 100 since entrepreneur Chris Petty launched the business in 2008.

Smaller players, too, have found their niche in the sprawling IT market.