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Grand Bazaar IstanbulMedia is hard. Let’s go shopping!

In Silicon Valley, market-watchers are looking to digital media in its many forms — social networks, tablet apps, user-generated content — to revive the IPO market. That’s why there’s so much buzz about Zynga and Facebook as IPO candidates. But there’s a smarter bet for investors: e-commerce.

Don’t scoff. Sure, after the dotcom bomb, e-commerce had a stench from, Webvan, and other expensive duds. But savvy investors who looked past those failures and embraced true innovation have put hundreds of millions of dollars into rising stars. From Groupon to Etsy and FreshDirect to, a cunning new breed of e-commerce players should be ready to test the public markets soon.

Here’s one way to think about it. In the free, ad-supported media world, people spend their time to save money. In e-commerce, people spend their money to save time. Which business would you rather be in?

Amid the buzz over the future of media, this development is getting short shrift. Take, for example, Wired editor-in-chief Chris Anderson, who recently claimed that “the Web is dead” — an argument-provoking, apps-enthralled piffle which was rapidly revealed as ill-thought-out nonsense, supported by fudged infographics and tendentious reasoning. But one of his caveats contains hidden wisdom: “E-commerce continues to thrive on the Web.” Yes, e-commerce got seven words out of a magazine cover story.

It’s natural for journalists to obsess about the media business. But while the advertising business has gone through wild gyrations as it moves online and grows ever more efficient, online shopping has continued to grow apace. In mature markets like America, the sector has posted respectable growth numbers through a recession, while in emerging markets like China, it’s growing like wildfire — up 60 percent year-over-year in the first six months of 2010.

One other reason why e-commerce startups could stand out: They’re relatively easy for analysts and investors to understand. And with all the inefficiencies of traditional retail, there’s plenty of ground for socially networked, Internet-driven innovators to seize.

FreshDirect, an online-grocery delivery company based on Long Island, is a household name in New York. It also has an experienced Internet hand, former Priceline CEO Richard Braddock, at the helm. He’s looking to raise money, either privately or through an IPO, to expand FreshDirect nationwide.

Groupon, the social-buying startup which offers deals on local businesses to groups of users who band together online, mixes elements of social networking, local advertising, and e-commerce. It’s on an international shopping spree, like eBay in the late ’90s, to establish itself as a global brand. That acquisitive expansion could let it post the kind of growth numbers technology investors like to see.

Quidsi, the parent company of the self-evidently named, has expanded into all kinds of daily necessities through the launch of Like Zappos did in shoes, it has shown that is not invulnerable. (And, like Zappos, it could make an attractive acquisition target.)

Gilt Groupe, One Kings Lane, and similar flash-sales sites are bringing luxury brands and new designers to the Web through clever marketing and merchandising. Cordarounds maker Betabrand and the newly launched Saboteur are showing how fashion startups can bypass traditional channels to sell their own wares directly. And Etsy, which lets small handicrafts makers market their own wares, is riding the popularity of the customer co-creation trend, where marketplaces harness the creativity of their users.

While the media world faces a set of tough choices — figure out how to survive the information glut of the open Web, or give up control to closed platforms like Facebook or Apple’s App Store — e-commerce, inheriting the healthily chaotic traditions of the bazaar, is quietly thriving. It’s time investors started putting these companies on their shopping list.

[Photo: neilbetter]

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