Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds Russia in a spending mood, and the IPO market running dangerously hot.

First up this week is Ozon, which some call Russia's answer to Amazon.com (NASDAQ:AMZN). Its stats are certainly impressive: VentureWire reports that Ozon sells more than 260,000 items in 12 categories. That, in turn, attracts 120,000 unique visitors and 3,000 orders per day.

What's more, Ozon had a notable guest appearance in Fortune's recent profile of the slowly resurging Siberian science city known as Akademgorodok, which held a place of honor in the old Soviet Union. Today, scientists operating there have become expert coders, their services sought by large Western firms such as Intel (NASDAQ:INTC) and Schlumberger (NYSE:SLB).

Interestingly, Fortune reports that many of the Siberian scientists relieve their boredom with goodies ordered through Ozon, which has mastered the postal system to get books, music, and DVDs to the farthest corners of Russia.

Investors need no further convincing. Index Ventures recently teamed with the private equity arm of Cisco Systems (NASDAQ:CSCO) to provide $18 million in financing for Ozon, which is led by Swiss-born CEO Bernard Lukey.

Explaining the deal in an interview, Index Ventures general partner Giuseppe Zocco told VentureWire, "One thing we have seen in the Western market -- the category leader enjoys a strong position if they can keep their lead. We see here one of the rare combinations of talent, training, and a Western European CEO -- so it's a very attractive combination of an international CEO and local domination."

I couldn't agree more. Western capitalism may be catching on worldwide, but there's plenty to be said for local expertise. Applied well, it can produce a durable advantage against foreign competitors, thereby delivering excellent returns for early investors. Chinese search specialist Baidu (NASDAQ:BIDU), up more than 8% against the index since joining the Rule Breakers portfolio in November, is a perfect example.

Meanwhile, the IPO market remains as hot as it ever was. According to data from researcher VentureOne, 13 venture-backed firms completed IPOs in the first quarter of 2007. Together, they raised $1.2 billion, twice what the same number of VC-backed firms took in last year at this time.

You know what's happening here. Firms are commanding far higher valuations than they did just a year ago. Actually, that's not quite right. VentureOne pegs the median pre-money valuation for a tech IPO at $477.1 million -- the highest total since the fourth quarter of 2001.

That wouldn't be so bad if corporate profits, as a whole, were accelerating -- but they're not. That metric nosedived in the fourth quarter, for just the second time since November 2001. (The other was during the 2005 third quarter, when Hurricane Katrina wreaked death and destruction across the Gulf Coast.)

Color me a worrywart if you must, but I find it really hard to believe that the average IPO deserves a premium price tag. Baby Breaker alumnus BigBand Networks (NASDAQ:BBND) might make the list. But Switch & Data (NASDAQ:SDXC)? I'm still trying to figure out how this Faker Breaker managed the largest IPO of the quarter, taking home $198.3 million, according to VentureWire.

Here's my point. IPOs have held a seller's advantage, thanks to the active participation of hedge funds and private equity firms in the stock market. If that continues -- it may not -- then the chances that you'll score a bargain at a stock's debut will be extremely limited at best. Proceed with caution.

See you back here next week, when we continue our quest to find the greatest growth.

For more Rule Breaking Foolishness:

How great is growth? Four of the dozens of stocks in the market-beating Motley Fool Rule Breakers portfolio have at least doubled in the first two years of the service. Care to find out what they are? Click here to get 30 days of free access to Rule Breakers, with no obligation to subscribe.

Fool contributor Tim Beyers, who is ranked 869 out of more than 25,500 in Motley Fool CAPS, is a sucker for growth stocks and a contributor to David's Rule Breakers team. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on growth stocks, Foolishness, and investing in general may be found in his blog. Amazon is a Stock Advisor pick. Baidu is a Rule Breakers pick. Intel is an Inside Value recommendation. The Motley Fool's disclosure policy is a rebel on Wall Street.