Kleiner Perkins gets its digital groove back on

November 29, 2010, 8:00 AM UTC

After taking a long detour into green-tech investments, the storied venture firm is returning to its sweet spot: the Internet.

Just two years ago people (including Fortune) were fretting that venture capital firm Kleiner Perkins — an early investor in Netscape, Amazon (AMZN), and Google (GOOG) — had missed the wave on the latest round of hot Internet startups in favor of a slew of risky wagers on “green” energy. (See “Kleiner Bets the Farm“) Maybe, whispered many in Silicon Valley, mighty Kleiner wasn’t all that relevant anymore.

While it’s too soon to say Kleiner is back, it is fair to say Kleiner is back from irrelevancy. A bevy of successful “exits” — VC-speak for sales or public offerings that make money for the firm’s investors — have outweighed some of Kleiner’s clean-tech clunkers. What’s more, while partner John Doerr hasn’t abandoned his green pursuits, he has started talking once again about information tech, a welcome relief for some of his backers. Said one longtime investor in Kleiner’s funds: “They have stopped drinking the Kool-Aid and are committed to coming back and focusing on making money again.” And Kleiner, which declined to comment for this article, absolutely is making money.

Two investments, Amyris and Pacific Biosciences, have gone public, producing modest returns. A digital-gaming company, Ngmoco, was sold to a Japanese gamemaker for a healthy profit. And Kleiner’s one runaway, if unrealized, success is Zynga, the maker of online games such as FarmVille and Mafia Wars. The recent announcement of Kleiner’s trendy “sFund” for social-media companies at least signals where Kleiner’s heart is these days.

The refocusing of Silicon Valley’s premier venture firm comes at an opportune time. Competition from individuals and new venture firms raising big funds has become fierce. Kleiner currently is seeking investors for two new funds totaling more than a billion dollars. The firm is hardly done with alternative energy. Among its undetermined bets is Bloom Energy, a hyped fuel-cell concern. Other investments, such as troubled oil-exploration company Terralliance, are sinkholes.

Being green never was easy. But making green used to be a specialty of Kleiner Perkins — and with the firm’s renewed focus, it could be yet again.