For eight years, I've made my living from online journalism, so I spend almost all of my working day online.
Nevertheless, I'm still something of a Luddite in this field. For example, I'm not on Twitter or Facebook and (wait for it) I don't even have a mobile phone, never mind an iPhone 4!
Luckily, I do have a friend (I'll call him Brian) who is a star performer at one of the world's very largest technology firms.
As well as technical expertise and decades of experience, Brian has every must-have electronic gadget and many more besides. Thus, for more than a year, he has been my sounding board for anything to do with the Internet, digital media, telecoms, and technology.
Recently, I asked Brian to list his favorite Web-based firms: the online businesses that, in his expert opinion, dominate the online world and will continue to do so for the foreseeable future. Within seconds, he gave me a list of six "kings of the Internet."
As you'd expect, these six are all American corporations. Listed in A-Z order, they are:
|Market capitalization||$290 billion|
Originally founded as a manufacturer of personal computers, Apple has grown and evolved into the world's biggest technology company, overtaking Bill Gates' Microsoft earlier this year.
Apple's domination of digital media comes from its production of best-selling devices, such as Macintosh computers, iPods, iPhones, and iPads. In addition, its iTunes store is the No. 1 vendor of (legal) online music downloads, with a 70% market share. With the Beatles joining iTunes a couple of weeks back, almost all major musicians' output can be bought via iTunes.
Apple's genius comes from its total belief in elegant design and simple GUIs (graphical user interfaces), backed by strong integration of its hardware, software, and online offerings.
Today, I still kick myself for not recognizing Apple's brilliance by buying its shares. Indeed, I suggested to a Foolish friend that Apple shares were overpriced two years ago, when they were trading at around $100. How very wrong I was, as they have more than tripled since then. Oops.
2. Cisco Systems
|Market capitalization||$107 billion|
Brian describes Cisco as "the backbone of the Internet," thanks to its dominance of the market for Internet-networking technology. At the height of the dot-com boom in 2000, Cisco was valued at more than $500 billion, making it the biggest company in the world. However, its shares deflated spectacularly as the bubble burst, and they have climbed a mere 10% in the past five years.
What's more, Cisco (founded near San Francisco, hence the name) has had some recent problems, notably a profit warning on Nov. 11 that saw shares drop drastically. Nevertheless, with $40 billion of cash and cash flow of $9 billion a year (plus a maiden dividend), Cisco smells of value to me -- especially if it can continue its run of earnings-enhancing acquisitions.
As I said earlier, I'm not a Facebook member, but the world's largest social-networking site has roughly 550 million users, with a further 10 million joining each month. To put this into context, the world population is around 6.7 billion people, so 1 in 12 humans already belong to Facebook.
Hence, if I could own just one business, it would be Facebook. Likewise, if I could swap places with another individual, I'd like a shot at being 26-year-old Mark Zuckerberg. Zuckerberg, who co-founded Facebook in 2004 while at Harvard, still owns 24% of the iconic company.
At present, Facebook is a private company, so you can't buy shares in it. However, recent share sales by Facebook employees and investors place a value of nearly $34 billion on the firm. Who knows how much Facebook will be worth when it finally announces its initial public offering?
By the way, although you can't buy Facebook common stock, you could invest in London-listed Mail.ru Group. The Russian Internet firm, which had its London IPO on Nov. 5, owns 2.4% of Facebook, as well as being Russia's No. 1 email provider.
|Market capitalization||$182 billion|
What can I say that hasn't already been said about Google?
The giant of online search is the most-visited website in the world, ahead of Facebook at No. 2 and Google-owned YouTube at No. 3. What's more, Google's non-English websites also dominate the upper reaches of the world's top 100 websites.
I use Google at least 200 times a day to search, read, and shop, so it is the cornerstone of my Internet experience. Alas, my dumb move was not buying Google at its IPO in August 2004. I then compounded this error by not buying its shares when they briefly fell below $250 in November 2008, during the post-Lehman meltdown. Dumb, dumb, dumb!
|Market capitalization||$120 billion|
Although it is 30 years older than Google, Intel (from Integrated Electronics) is only two-thirds of the size of the Goliath of search. Nevertheless, as the world's largest semiconductor chip maker, Intel sits at the top of another important technology mountain: PC hardware.
Alas, thanks to cut-throat competition in its market, especially from low-cost Far Eastern manufacturers, Intel's share price has fallen by a fifth over the past five years. Even so, its elliptical blue logo and sound logo are everywhere, making Intel a household name worldwide.
Despite the threat from network computers and cloud computing, I suspect that Intel's global presence will help it to profit from the next wave of technological change, either through internal change or acquisitions.
|Market capitalization||$10.7 billion|
I end with Netflix -- a company about which I knew very little until I researched this article, and the smallest of Brian's picks.
As well as renting DVDs and Blu-ray discs by mail, Netflix is one of the leading providers of (legal) on-demand video streaming in the U.S. and Canada, with close to 17 million members. Indeed, the massive success of Netflix certainly contributed to the September bankruptcy of its high-street rival Blockbuster Video.
Thanks to its domination of the online movie-rental market, Netflix has attracted a number of fans on Fool.com, and has been repeatedly tipped by Fool writers and users.
Now it's your turn
Finally, you'll note that I haven't included price-earnings ratios, dividend yields, or other fundamentals for these firms. Those are for you to research. All I've done is point out six companies for you to begin your search for the next big winners from the Internet. Happy hunting!
More from Cliff D'Arcy:
This article has been adapted from our sister site across the pond, Fool UK.
Cliff D'Arcy doesn't own shares of any companies mentioned. Google, Intel, and Microsoft are Motley Fool Inside Value recommendations. Google is a Rule Breakers selection. Apple and Netflix are Stock Advisor picks. The Fool has written calls (Bull Call Spread) on Cisco Systems. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel and a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, and Microsoft.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.