Sideways. I like sideways. Do you like sideways? You'd better like it, because that could be the direction of the market in technology stocks over the summer. At least that's what the optimists think.

At a start-up or thinking of investing in one? Then you might want to think of the ramifications of a more sedate stock market. The venture capitalist (VC) that promised you a multibillion IPO is now scrambling to keep the deal flow from drying up. Stop thinking about that easy sell-out and start thinking about how to build a viable business, because the big-money liquidity events won't be as easy to come by.

It's not necessarily a bad thing. After the powerful move upward late last year and early this year and then the brutal technology sell-off in March and April, it appears that everybody could use a little break. And summers are typically slow in the tech world, so get used to it.

"I think sideways movement is a completely good thing," says Don Luskin, founder and CEO of Metamarkets.com (http://www.metamarkets.com/) and advisor to Open Fund (http://www.openfund.com/, a technology investment fund. "There are two ways to follow upward trend set in the market since 1998: you can have a giant crash or you can have a lot of sideways movement. What we had recently was a correction but it was not a giant crash. So of those two options, the latter seems like a pretty good thing."

Luskin has a good point. Everybody thought that March and April was a proper crash--after all, the Nasdaq Composite lost roughly 40 percent of its value in a month and some stocks lost far more--but there are still some lofty valuations out there.

Indeed, it's enough to scare some fund managers away from technology altogther. Michael Johnson, a research analyst with Veredus Asset Management LLC (http://www.veredus.com/), said the fund is moving some of its tech money into safer sectors such as energy. "We don't see near-term catalyst for the markets going up," says Johnson. "Earnings season is over, the interest rates are going up. There isn't a lot of good news and the valuations in the tech sector are still high."

But the forward-looking technology investor is not worried about valuations, because he or she is busy looking for the next disruptive technology that will rewrite the rules. None of that is going to change because of the stock market. In fact, the stock market has become nothing but a real-time arbiter of consumer brand taste--a meter of the Internet marketing fad of the moment. Real technology--stuff that unlocks to value of networks and bandwidth and gives applies it to real business cases--will always be in favor in the financial world.

Some of the raw guts of the Internet--including optical networking technology, software infrastructure, and broadband applications--are still in their infancy. The Internet in 2000 is akin to the desktop operating system in 1989. The markets are resting. If the markets go sideways this summer, its a good time to strategize about what to do now that the world has changed.

--R. Scott Raynovich, excecutive editor,Light Reading http://www.lightreading.com