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Zillow started out its second day as a publicly-traded company with continued momentum as shares gained another four percent to $37. The company is now valued at $651 million — which means investors now value it more than RealNetworks, Blue Nile and Marchex.

Is Zillow’s initial public offering a watershed moment? Some journalists are treating it as such, using the online real estate company as an example of how the tech market is overheating.

There’s certainly evidence of that, and you can read more about it in these stories:

GigaOM: Zillow IPO gets warm welcome — but will it last? 

Barron’s: Zillow soars, but where does it go from here?

Reuters: Zillow blazes in market debut, skeptics abound

But here’s why some of the bubble chatter might be — excuse the pun — overinflated. Zillow — unlike the dot-coms that came before it — is a real company. It has real revenue. And it is in a huge market ripe for transformation.

And while news organizations — including GeekWire — have consistently pointed out that Zillow has not yet generated net income on a quarterly basis, the company is very close to doing so.

In fact, so close (it lost $827,000 during the second quarter), that when the company reports financial figures in early August for the first time as a public company I wouldn’t be surprised to see the company shift into the black.

I asked CEO Spencer Rascoff about the “P” word in an interview on Wednesday and he noted that the company has been cash-flow profitable and EBITDA profitable for three quarters. Net income might just be around the corner, though that milestone alone won’t get the company out of the woods.

As one Seattle entrepreneur told me yesterday, it will be more important to check the value of Zillow’s stock in six months after insiders can sell their shares.

Meanwhile, the bubble debate continues to rage. And while certain companies invariably won’t be able to meet the lofty expectations placed on them, including the possibility of Zillow, others will.

After all, David Magee at the International Business Times notes that “eight times more people use the Web today than in 2000.”

A growing percentage of those people now have broadband Internet connectivity (and smartphones) and there’s no denying that our lives are becoming increasingly digital. Companies will take advantage of that shift.

Zillow, for one, has benefited from this trend as real estate agents look for more effective ways to reach customers than traditional advertising.

“The housing downturn has helped accelerate the migration of real estate advertising budgets from offline to online, and Zillow has been an beneficiary of that migration,” Rascoff told GeekWire on Wednesday.

So, bubble or not, companies will march forward trying to take advantage of what amounts to a tectonic shift in how information is shared and processed.

Previously on GeekWire: Shares of Zillow skyrocket in debut

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