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Some great new ideas require a skewed vision of the world, a leap of the imagination, and a healthy dose of optimism to see through to the desired outcome. Other new technologies just make sense. Fool analyst Sean Sun prefers the latter. He's watching three companies that have the potential to change the landscape of their respective industries, because they're riding strong, common-sense, but still pretty cutting-edge ideas.

Customized communication
For a small business, a giant telecommunication system makes about as much sense as a minivan does for a young bachelor. It's expensive, packed with unnecessary features, and incredibly uncool. 8x8 (Nasdaq: EGHT  ) works to tailor a package for each customer based on its actual usage, employing Voice over Internet Protocol (VoIP) technology instead of the clunky equipment of the olden days. As 8x8 CEO Bryan Martin told me recently, "[W]ith our offerings and our focus on customer service and the fact that for lots of customers what we're offering makes a lot more sense than a closet full of equipment, I see a lot of growth ahead of us."

Sean agrees:

VoIP is such good quality now that you're not losing anything from traditional telecom equipment, and the easier you can make it for your customers the better. At this point, it's a marketing game for 8x8. They can't match AT&T on technology, but if they can give lower-cost, customer-specific service, it just makes sense.

He still needs to determine what sets 8x8 apart from other VoIP telecom providers, but he loves seeing a disruptive technology shaking up the industry's staid behemoths.

Zapping data
Another potentially game-changing yet logical technology comes from NXP Semiconductors (Nasdaq: NXPI  ) , a leader in the nascent market of near-field communications, in which two devices close to each other can share data wirelessly. Basically, you'll be able to swipe your phone over an RFID transmitter on a product and get reviews, pricing, and everything else you might want to know. It's not hard to envision the technology enabling peer-to-peer mobile apps -- imagine using your smartphone instead of a credit card to make payments, along with a host of other really cool stuff.

Google (Nasdaq: GOOG  ) recently announced that it would use NXP's chips in its flagship Android device, which sent NXP's stock up more than 10%. And rumors are swirling that Apple is interested in the chips for its iPhone, says Sean. "NXP is the key player here, but the company's not a start-up. Even if it remains the leader in this field, I need to see how much impact this might have on the company's overall financials before I commit to buying."

The YouTube of China
Finally, as anyone who has watched videos of cats playing pianos or any of the OK Go videos knows, YouTube has changed lives. Sean has his eye on (NYSE: YOKU  ) , YouTube's Chinese equivalent, which means it could eventually be several times bigger than YouTube.

"If the Google/Baidu (Nasdaq: BIDU  ) debacle taught us anything, it's that China provides its companies a huge home-field advantage -- it's going to be very protectionist going forward," says Sean. "If you're going to try to make headway into China, you're going to have a better chance if you get a Chinese partner on your side, and that positions Youku nicely."

The company is still in the land-grab phase of development, and it's only marginally profitable at best. But once it turns its attention to monetization, Sean thinks it'll become a stellar growth story that just makes sense.

You can click here on 8x8, NXP Semiconductors, or to start tracking any of these companies on, a free new service from the Fool. When you do, you'll also have instant access to the new free report, "Six Stocks to Watch from David and Tom Gardner." Or click here to get started now.

Roger Friedman doesn't own shares of any of the companies mentioned above, but he'll be watching them. Baidu and Google are Motley Fool Rule Breakers picks. The Fool owns shares of Google, which is also a Motley Fool Inside Value selection. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insightsmakes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (7) | Recommend This Article (28)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 25, 2011, at 11:14 AM, earthlyskyfool wrote:

    Amazing how this yoku is getting hyped. Isn't there some profitable company with a better outlook(not pie in the sky like yoku) to write about?

  • Report this Comment On February 25, 2011, at 11:50 AM, SirLongalot wrote:

    hah! YOKU has never been profitable since its inception in 2006... it isn't "marginally profitable", they have negative gross margins!

    they are supposed to make a penny per share (or 1 million dollars) in 2013

    That is marginally profitable, and a long ways away too

    Baidu was extremely profitable before and after its IPO, thats why you saw the appreciation you did.

    Good luck getting the Chinese to pay for video content, when their culture is known for pirating things!

    Also, finally, good luck pumping your 40,000x forward earnings stock dude, you'll need it. You might want to get out before earnings on Monday though, this is nothing more than an "earnings runup". Take a look at a stock like Smith and Wesson SWHC to see how those work out (hint, usually followed by precipitous drops)

  • Report this Comment On February 25, 2011, at 3:02 PM, mzkitti wrote:

    About ...I would not get too excited about this one.

    People think it is another Amazon..then you have to remember

    Amazon and the very long way Amazon has come...

    If you can leave your money in Youku for a very long time

    then go for it.


  • Report this Comment On February 25, 2011, at 5:36 PM, locololo2 wrote:

    ^ is a video website, similar to Youtube.

    It is not the Amazon of China...

  • Report this Comment On February 25, 2011, at 8:20 PM, ZHD wrote:

    it's hard for YOKU to earn money because 1. it's revenue is about 35M and net loss about 25M. 2. people pay less than $1 to buy a pirated DVD. 3. if YOKU can earn money, big giants like Tecent, Baidu and Sohu will be in competition. Actually they're already in. it's really absurd that Yoku values $3.81B but Sohu only $3.11B, the latter is the second largest portal in China and one of fifth video sharing player.

  • Report this Comment On February 25, 2011, at 8:53 PM, Blueman1000 wrote:

    I believe that all of this hype about the Chinese market for so many internet based sites will fall flat on it's face along with each one of those Government controlled sites once the wall comes down and true freedom of speech comes to China. Chinese are going to overload Google to reasearch and locate information that the rest of the world has access to. They're human beings and they're going to want to experience what everyone else has been experiencing. Don't forget about the info pirates that are able to access Google, and Yahoo and other sites, I don't know what the underground numbers are but it could be huge, and I just believe that many people are setting themselves up for a huge fall.

    Once the Chinese government is overthrown and te 800 Million people (peasant farmers etc) demand a share of the pie, the social services that the other 300 Million (economically active) Chinese will find salaries cut due to tax increases to offer education and other social services and those persons will cut back on goods and services as well.

    China is not an economical miracle, it's a house of cards waiting to fall and "Great will be the fall thereof".

  • Report this Comment On February 28, 2011, at 11:07 AM, joroi wrote:

    I second what others have said about YOKU. I have similar reservations for NXPI, whose stock has doubled since Nov 2010 and fundamentals do not look promising.

    In summary, this article is really about long shots that have higher potential to lose you money than to help you make money. Look elsewhere.

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