We describe recent developments and results of statistical learning theory. In the framework of learning from examples, two factors control generalization ability: explaining the training data by a learning machine of a suitable complexity. We describe kernel algorithms in feature spaces as elegant and efficient methods of realizing such machines. Examples thereof are Support Vector Machines (SVM) and Kernel PCA (Principal Component Analysis). More important than any individual example of a kernel algorithm, however, is the insight that any algorithm that can be cast in terms of dot products can be generalized to a nonlinear setting using kernels. Finally, we illustrate the significance of kernel algorithms by briefly describing industrial ...