The NASDAQ Internet Index has declined more than 50% in under three months, faring far worse than the Dow Jones Industrial Average. The index, which is around 62 now, was at 127.2 on August 29, representing a drop of about 51%. In comparison, the Dow dropped about 31% in the same period (see chart, below).

The NASDAQ Internet Index, which goes by the ticker symbol ^QNET, was launched one year ago to track the performance of companies engaged in Internet-related services. Yahoo Finance lists 75 components, including the stocks of industry powerhouses such as Google, Amazon.com and Ebay. These three components are off since late August. AMZN is down 55%, EBAY is down 54%, and GOOG has dropped 42%.

The times are especially bad for Yahoo, which is also part of the index. Its stock is off 54% since late August, and the decline from the beginning of the year is ever worse: YHOO is now worth less than a third of what it was when Microsoft offered to acquire the company in January.

But some financial experts believe that, in general, publicly listed Internet companies are better off than most, despite their relatively high stock prices.

An analysis on the price-to-earnings values for Internet stocks indicates that they are more expensive compared to the Dow, said Mark Phanitsiri, an investor at Sageview Capital, a Silicon Valley investment firm.

"The Internet Index is still over twice the earnings multiple of the Dow," he told The Industry Standard. "Even after all this carnage, investors still have much higher growth expectations from Internet companies than the broad markets."

Percentage decline of Dow Jones Industrial Average vs. Nasdaq Internet Index since August 29, 2008:

Nasdaq Internet Index since August 29, 2008:

Charts: Google Finance

Photo: (AP Photo/Jason DeCrow)