Shares of real estate site Zillow Inc skyrocketed in their market debut on Wednesday, the latest to ride a wave of dotcom exuberance while stoking fears of lofty Internet valuations.

The six-year-old, loss-making real estate website, which recorded $30.5 million in revenue last year from providing housing value appraisals online, soared to as much as $60 -- a three-fold increase from its IPO price of $20.

Investors shrugged off the company's dependence on an uncertain advertising and housing market. Zillow's initial pop in value bested social media player LinkedIn, which doubled in value in its first day of trade in May.

The mere fact that LinkedIn and HomeAway did so very well only helped it, and put even more euphoria into an IPO that didn't need it, said Scott Sweet, senior managing partner at IPO Boutique. It already had the demand anyway.

Zillow is the latest in a string of hot Internet firms -- including LinkedIn -- to create a market frenzy in its first day of trading. But for some of those stocks, that burst of enthusiasm vanished rapidly. Chinese social networking site Renren Inc, for instance, is now trading below its IPO price after soaring as much as 57 percent in its May debut. Similarly, shares of online radio service Pandora traded below its June IPO price for several days before rebounding.

Zillow now trades at more than 30 times revenue, while its closest listed rival, Move, owner of sites like Realtor.com, trades at just 1 times revenue. Trulia Inc, which competes with Zillow.com and is backed by Accel Partners and Sequoia Capital, is also looking to go public.

Investor nervousness is mounting as U.S. economic growth sputters. Early 2011 optimism -- nearly 80 percent more was raised on U.S. equity markets in the first half of this year than in 2010's first six months -- has given way to warnings of a second-half slowdown in the pipeline.

In the tech sector, such fears are particularly relevant given the dot-com crash of 2000, when the likes of theglobe.com, VA Linux and Marketwatch.com rose six- or seven-fold in their market debuts, whipped into a frenzy by day traders. Many of those so-called bubble babies quickly burned through their proceeds and subsequently vanished, leaving investors holding the bill.

But all such concerns went out the window as investors piled into a stock with a non-existent profit track record.

More than 5.8 million shares changed hands, or more than one-and-a-half times the 3.5 million shares available for trade.

Zillow, which closed the day up 79 percent at $35.77, was absolutely not worth its valuation, David Menlow, president of IPOfinancial.com, told Reuters.

I am from the school that all of the offerings in this marketplace are just so frothy that it defies any type of sensible valuation modeling.

ZESTY ESTIMATES

Seattle-based Zillow offers rent and house price estimates, called Zestimates, as well as real estate data on millions of U.S. homes through its websites and mobile phone applications.

Some observers argue that Zillow's bravura first-day performance is justified by its long-term potential, especially with signs of a recovering advertising market, Zillow's primary source of revenue. They like its strong hold in a niche segment and revenue-boosting deals with companies like Yahoo.

Zillow has exclusive rights to sell real estate agent advertising and certain graphical advertisements for display throughout the Yahoo! Real Estate site.

The site -- which had 22 million unique users visiting its website and mobile applications in May -- halved its losses in 2010 and posted revenue of $30.5 million last year, up nearly 75 percent from a year ago.

(Additional reporting by David Gaffen in New York and Jochelle Mendonca; Editing by Edwin Chan and Bernard Orr)