By Meg Richards
The Associated Press

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. Slowly but surely, the Web is supplanting traditional sources of information - phone books, help wanted ads, movie listings - and becoming the place where we go to find stuff.

Now, with paid search services like those offered by Google and Yahoo! Inc., advertisers and marketers can easily target their messages to each one of us, specifically, according to the key words we use. With paid searching, advertisers only pay for their ads on the Google and Yahoo sites if users follow their links. It's highly economical, and by tracking users who click, advertisers can directly calculate their returns.

To a marketer, this looks like a better deal than placing ads in passive mediums, such as television, magazines, newspapers and Yellow Pages, where there's no real way to measure impact. With the Internet's unique, interactive nature, you know precisely how effective your advertising strategy has been.

To get a clearer picture of what the most bullish investors on Wall Street are thinking as they snap up search engine stocks, consider this: Spending on ads in Yellow Pages totaled about $14 billion last year, while online paid search ad spending came to just $2.5 billion. That means there's an awful lot of business that could migrate to companies like Yahoo and Google in the years ahead.

What's less clear is which of today's search engine darlings will capitalize most on this opportunity. Do a Google search for "search engines," and you don't have to dig very deep to find the dusty Web pages of yore, detailing the heady performance of stocks like Excite, Infoseek and Lycos. If the search industry was in its infancy in the late '90s, it is merely in its toddler stage now, analysts say.