By Stephanie N. Mehta

(FORTUNE Magazine) – IN JUST THE LAST YEAR, STARTUP GOOD Technology, which serves up e-mail and other software applications on wireless devices, has raised a tidy $45 million from private investors, announced partnerships with everyone from Nokia to Oracle to Verizon Wireless, and touted several important customer wins. (One press release bore the breathless headline OTIS SPUNKMEYER MELTS OVER GOODLINK: GOOD TECHNOLOGY PROVIDES OPERATIONAL EFFICIENCY TO WORLD-FAMOUS COOKIE MAKER.)

Good is a great example of the current fervor for all things wireless. Venture capital firms last year poured nearly $1 billion into everything from purveyors of do-it-yourself ring tones to sellers of Wi-Fi systems. The bet: that people will want to do all their work and play on the go--on gadgets the size of a pocketknife. There's no question we are a society untethered, and many of the upstarts are selling stuff people really want. But analysts say the wireless boom is attracting scads of newcomers peddling useless services-- or getting into the game too late. John Donovan, president and CEO of wireless consultant InCode, says that about a year ago he was evaluating companies selling antennas for corporate Wi- Fi systems. He saw dozens. "There's a saturation of companies that hold great promise but don't have a heck of a lot of revenue," he says. "The lead indicators would suggest there's definitely a minibubble."

Valuations, too, are reaching Netmania heights. Cisco recently acquired Airespace, a startup that provides Wi-Fi gear to companies, for $450 million, a frothy eight times Airespace's 2004 revenue. (Cisco, in contrast, trades for about five times revenue.) Jamdat, a publicly traded maker of games for wireless phones, now trades at 66 times earnings, while established videogame company Electronic Arts trades at 35 times earnings.

Behind the wireless boom are some familiar dot-com names. Digital Chocolate, a developer of games and other diversions for cellphones, is backed by Kleiner Perkins--one of the VC firms most closely associated with the Internet era. Another investor: none other than Bob Pittman, former president of America Online. And remember Infospace, the onetime portal company that became a symbol of dot-com excess? A few years ago it brought in new management and recast the company as a seller of ring tones and other wireless fare.

Executives, of course, say the current wireless boom bears only scant resemblance to the Internet bubble. "In the bad old days there were a lot of businesses without profits or even paying customers," says telecom veteran Jim Voelker, who became CEO of Infospace in 2002. Last quarter Infospace posted net income of about $19 million, and Airespace, for instance, was winning business from Cisco's customers before it was acquired by the networking giant.

One bright spot: Few wireless wannabes have gone public, so individual investors don't have much to lose. This time, predicts Donovan of InCode, "when the bubble bursts, it is going to burst on the laps of the venture capitalists." -- Stephanie N. Mehta