Big winners so far include Blue Nile (NILE), up 73 percent; Expedia (EXPE) up 68 percent; and Amazon (AMZN) up 44 percent. Moderate winners, comparatively speaking, include Google (GOOG) up 27 percent; eBAY (EBAY) up 21 percent; and Yahoo (YHOO) up 22 percdent.

Here’s the full breakdown of the 16 Internet stocks Mahaney covers (click table below to enlarge):

I usually steer well clear of opining/guessing about stock prices and the like, but I think it’s worth considering Mahaney’s note, both for his explanation and for the potential impact of the stocks’ run.

The explanation: Part of this is basic what-goes-down-must-go-up market yo-yoing–Internet stocks got pummeled worse than the rest of the market last year so it’s easier for them to bounce back. But Mahaney also thinks that most of the stocks he follows are going to turn in the worst performance, earnings-wise, in the quarter we’re in now. Investors like that because it means that things can only get better.

The impact: Remember the old days when public companies could use their shares as currency to acquire smaller companies? Well, we’re not headed back there quite yet. But a sustained rally sure could kick-start the M&A market, which will make things more interesting for the likes of me, at the very least.

[Image credit: joshmadison]

Barron’s Eric Savitz summarizes the notes from Citigroup’s Mark Mahaney, Collins Stewart’s Sandeep Aggarwal and Stanford Group’s Clayton Moran. So I’ll just highlight one part of Mahaney’s argument: A check of four big online e-commerce companies–Amazon (AMZN), eBay (EBAY), Expedia (EXPE) and Priceline (PCLIN)–indicates that they’ll be making dramatic cuts in the amount they spend on Web advertising this quarter (see chart below).

“These companies are staring into what could be an ecommerce abyss and appropriately cutting back on their marketing spend, certainly including their spend with Google,” Mahaney writes.

To recap: Dollars are continuing to move from traditional media outlets online, and Google is capturing the lion’s share of that move. But even Google isn’t impervious to what’s ailing the economy right now.