Blue Nile reported slowing revenue gains and even slower profit growth for its first quarter ended March 2006. The question jewelers must ask is this: Is the bloom off the Internet rose?

The quick answer to our question is that Blue Nile is a maturing company. With $203 million in sales in 2005, it ranked as the ninth largest specialty jeweler in the U.S. At this level of revenues, it is simply not possible to continue to post huge gains quarter after quarter. In terms of aggregate jewelry Internet sales growth, it is also expected to slow from the prior years’ torrid pace. IDEX Online Research has projected that Internet jewelry sales growth will moderate to a range of +11-13 percent annually over the next five years.

Read more about Blue Nile's diamond jewelry sales at idexonline.com.