Adjusted for Reality, Neither Rackspace Nor Equinix Shine

Published on February 18, 2013
by Tiernan Ray

We learned during the dot-com boom, and the subsequent bust, that it takes real money to build the Internet, meaning that the growth of online advertising, e-commerce, social networking, and all the rest doesn’t offer a magic formula for profit.

But investors in recent years found a solution they like, plowing money into real-estate investment trusts that own the buildings housing the server computers that run websites. REITs pay out 90% of their pre-tax income in the form of dividends. So, despite heavy expenses on land and property, many investors consider it sort of a sure thing that these outfits will continually lever up and return money to shareholders.

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