The Internet was the hottest and most exciting sector in the late 90s, when Internet stocks initially came to the market. Of course, that was prior to the Internet stocks implosion in early 2000 that left the NASDAQ hemorrhaging from deep losses after trading above 5,000. Fast-forward 13 years and while the NASDAQ is heading for its third year of gains since 2010, the index remains well below its high point in 2000.

Internet stocks are a favorite of mine. This is where I believe some of the top money will be made going forward, with Internet stocks like Google Inc. (NASDAQ/GOOG), priceline.com Incorporated (NASDAQ/PCLN), and LinkedIn Corporation (NASDAQ/LNKD). Alternatively, there are other niche-market Internet stocks deserving of a look. (Read my thoughts in “Why There’s No Stopping the Internet Sector.”)

Take a look at the chart of the Internet Index below and the decisive upward trend since late 2002 as indicated by the solid blue line. Note the three successive higher tops as reflected by the short horizontal blue lines.

Internet stocks are clearly in an upward trend, based on my technical analysis.

Chart courtesy of www.StockCharts.com

While the majority of you are familiar with the brand-name Internet stocks I’ve already mentioned in this article, an up-and-coming small-cap Internet play that I feel has a great niche market and is worth a closer look is OpenTable, Inc. (NASDAQ/OPEN).

Having used the OpenTable service on a regular basis, I like the service, and I feel it offers users a valuable way of booking restaurant reservations.

OpenTable provides a real-time online restaurant reservation system that is free to use for booking a table at your favorite restaurant. You can make, edit, and cancel reservations at participating restaurants, currently including more than 27,000 restaurants located in the United States, Canada, Germany, Japan, Mexico, and the United Kingdom.

Let’s say you have a specific restaurant in mind and it is set up for the OpenTable system. You simply go to the reservation system, select the date and time you’d like a reservation, along with the number of guests and any additional requests. Once this is done, you are sent a confirmation of reservation e-mail and a reminder as the date of the reservation nears. You can cancel at any time.

For the restaurant, it means a 24-hour reservation system that is electronic and efficient.

For OpenTable, revenues are generated from a one-time installation fee for reservation software/hardware for the restaurant, a monthly subscription fee, and a charge for each restaurant guest seated via the service.

The stock debuted on May 22, 2009 at $31.97 and traded as high as $118.66 on April 25, 2011 before steadily declining to the current level, which is where I see a buying opportunity among the Internet stocks.

The price chart for OpenTable below shows a sideways channel, but a possible breakout, as indicated by the top blue horizontal resistance line, may be in the works.

Chart courtesy of www.StockCharts.com

Fundamentally, the company is profitable and has beaten the Thomson Financial earnings-per-share (EPS) estimates in four straight quarters.

The company’s revenues are estimated to rise 16.1% to $187.7 million in 2013, followed by growth of 15.3% to $216.4 million in 2014, according to Thomson Financial.

Annual earnings are estimated to come in at $1.92 per diluted share in 2013 and rise to $2.28 per diluted share in 2014.

Watch the large short position of 4.71 million shares, or 24.3% of the float as of April 15. Should the stock rally, we could see short-covering and an upward move in the stock.

OpenTable is an excellent play among Internet stocks and is worth a look.