A Trillion-Dollar Opportunity

Which company will become a trillion-dollar business? Going by the odds -- as in, those already close to the target -- you'd likely choose one of these:

Sources: Motley Fool CAPS and Capital IQ, a division of Standard & Poor's.

Any of them would be a safe choice. Maybe.

Maybe?
Here's the problem. As good as these stocks are, they're known quantities. They dominate businesses that have been around for years. Only the terminally optimistic -- the sort who'd agree to fit an elephant for a pair of gym shorts -- would expect any of these businesses to triple, quadruple, or even quintuple from here.

Even a double would be difficult. Consider ExxonMobil. Today, its 72.4 billion oil-equivalent barrel (BOE) resource base is worth roughly $333 billion in market value. Wouldn't that total have to triple, to 217 billion BOE, in order to justify a trillion-dollar valuation? I'd say so.

And that's a problem. There is no 140 billion-barrel pool of oil reserves waiting to be tapped. Not unless you include Iraq and Brazil, that is.

Go smaller to go big
Oil is too mature a market. The first trillion-dollar opportunity is anything but. Rather, it's hiding within today's billion-dollar markets, yet to be fully defined.

Cloud computing and clean energy are the two most obvious hideouts. One is reshaping how we use the Web for work and play; the other is reshaping how we interact with the planet.

But "obvious" isn't what we're after here. I want to show you the math behind a trillion-dollar opportunity. Let's use Google (NASDAQ:GOOG), an existing Motley Fool Rule Breakers recommendation, as an example.

Wait, did you say math?
The Big G is worth around $130 billion as of this writing -- $870 billion to go, a big gap. Were you looking at that gulf through the eyes of a Rule Breakers analyst like yours truly, you'd be asking two questions:

1. How much revenue does that $100 billion cover?
2. What's the overall revenue opportunity available to this business?

Our first question is easy. Capital IQ reports that Google booked $22 billion in revenue last year. So each dollar of Google revenue is worth roughly $4.50 in market value. Thus, at its present multiple, the Big G needs to get to around $225 billion in annual revenue to become a trillion-dollar business. Wowsa.

But also possible. Let's talk about the other half of the equation. AdWeek reports that worldwide advertising spending is to decline to some $425 billion this year. That's an encouraging number; the world's best-known advertising innovator accounts for only a sliver of the overall ad market.

And that's only one portion of its business. Google is so early in the development of its cloud computing platform that there's no good way to value it. Amazon.com (NASDAQ:AMZN) and IBM are also emerging competitors in this area. And yet, if researcher Gartner is to be believed, "cloud services" will account for $56 billion in spending this year and $150 billion in 2013, more than enough for Google and its peers.

How to be a rebel investor
A major opportunity? Definitely, but Gartner counts "cloud-based advertising" in its estimates, which means there's probably less here for Google than bulls would like to believe. Still, when you mix in contributions from the global ad market, there appears to be plenty of revenue pie for a growing Google -- enough to create a trillion-dollar business.

That's why I invested, and why David Gardner, our Chief Rule Breaker, admitted Google to our Rule Breakers portfolio. We believe in this process; we believe it's how you unearth trillion-dollar opportunities.

Care to learn more? Click here to get 30 days of free access to Rule Breakers. You'll get access to our analyst team's top five picks for new money now, and there's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Google and stock positions in ExxonMobil and IBM at the time of publication. Microsoft and Wal-Mart are Inside Value picks. Amazon.com is a Stock Advisor selection. Google is a Rule Breakers recommendation. The Motley Fool has an ironclad disclosure policy.