Search sites a tempting investment

NEW YORK — Even with the splashy arrival of Google Inc., there aren’t many publicly traded search engine stocks to choose from, and their valuations are not cheap. The growth potential for this sliver of the tech sector is huge, however, making it an attractive bet for more aggressive investors.

But buyer beware: The risks are outsized as well.

Part of the reason Wall Street is so excited about search engine stocks is it seems they are only beginning to realize their money-making potential. Now, with paid search services like those offered by Google and Yahoo! Inc., advertisers and marketers can easily target their messages and they only pay for their ads if users follow their links. To a marketer, this looks like a much better deal than placing ads in passive media. What’s less clear is which of today’s search engine darlings will capitalize most on this opportunity. “Like any early-stage, high-growth industry, be it biotech or technology in general or the Internet specifically, we’re still in the early stages of this industry’s evolution,” said Mark May, senior Internet analyst at Kaufman Bros. “The industry has been around not even 10 years. Results may be volatile, and because of that these are investments for risk-tolerant investors.”