Please ensure Javascript is enabled for purposes of website accessibility

5 Free Internet Winners

By Rick Munarriz - Updated Apr 5, 2017 at 7:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Free nationwide connectivity is a vote -- and bid -- away.

Access, as we know it, is about to change.

In two weeks, the FCC will vote on rules behind the sale of a sought-after chunk of airwaves. Chairman Kevin Martin wants to include the stipulation that the winning bidder must set aside 25% of the spectrum to roll out free Internet access to 95% of the country.

Is this huge? You bet. How exactly the bulk of the country's population will be canvassed with connectivity remains to be seen. Even if it does pass and a top bidder emerges, the actual roll-out should still be several years away.

However, it's not too early to size up the winners and the losers so that investors can get in -- or out -- early.

Let me go over five of the biggest winners if free Wi-Fi comes to pass.

Google (NASDAQ:GOOG)
It's hard to start this list with any other name than Big G. The dot-com giant already commands nearly two-thirds of the country's search queries. As any other company trying to make a mint in cyberspace will tell you, search is where it's at. You're not hitting up a search portal unless you want to go somewhere else, and advertisers pay top dollar for perfectly targeted keyword-based leads.

Google knows the power of access. Why else do you think it was offering to provide coverage throughout San Francisco for free three years ago? Google.com traffic will explode under a nationwide access platform. Sure, folks who can't afford access presently may be less desirable as sponsor leads, but trust Google to make it up in volume in the end.

Logitech (NASDAQ:LOGI)
Most of the winners will naturally be high-traffic websites, but let's make sure we get a hardware winner into the mix. Logitech announced that it shipped its billionth mouse yesterday, but the company makes other accessories that will greatly benefit from free Wi-Fi.

I'm talking about Logitech's strengths in webcams and Internet headphones. One of the biggest benefits of widespread connectivity is that folks will use free software to communicate with friends and families. That is naturally going to crack open the market for broadband communication devices, and Logitech is there with its Web-minded headphones and its huge line of affordable webcams.

Amazon.com (NASDAQ:AMZN)
If you think the shopping malls are decked in cobwebs and tumbleweed these days, you will probably be able to hear a pin drop in the food court once everyone has access to e-commerce.

Granted, those who lack high-speed access these days aren't going to be voracious shoppers. They watch their pennies. However, that will be great for Amazon's Prime membership program. Once folks are smitten by the two-day free deliveries on a growing range of products, more of their lives will revolve around a trip out to Amazon.com instead of a trek to a vacant shopping center.

eBay (NASDAQ:EBAY)
Forget eBay.com itself. By the time free access hits the masses, PayPal and perhaps even Skype will be bigger parts of this portfolio of verbs. Heck, even the name eBay may be toast as you crack open the 2012 annual report of SkypePal Incorporated.

Skype and PayPal will be the biggest winners of blanketed coverage. Skype remains the global voice chat leader with 370 million users worldwide. If you don't think that Skype will replace a few landline telephone accounts once connectivity is pervasive, you may as well Skype me to tell me otherwise.

PayPal is already the leader in micro-payments. It will become an even bigger force in real world transactions under Martin's scenario of access for all.

Nintendo (OTC BB: NTDOY.PK)
I need a video game console maker, because gaming is a growing market, and connectivity will allow the platforms to deliver more games digitally (high margins, baby) and to cash in on in-game advertising that is updated online. Nintendo is an easy choice, given its strong role on both the hardware side and its huge library of proprietary titles on the software side.

Yes, I could have gone with Microsoft (NASDAQ:MSFT) here. Xbox Live is way ahead of where the Wii and the PS3 are at these days. Microsoft also has the Wi-Fi friendly Zune, which would really benefit if it's still around in the future. Microsoft's MSN and Live.com will also cash in. However, my fear with Mr. Softy is that rampant connectivity will prop up cloud computing. Once the Web is serving up free productivity apps, Office sales will suffer, and to a lesser extent Windows once more server-stored apps are operating system agnostic -- since it's all about the browser.

Waiting is the hardest part
The winners make sense on paper, but we're still far away from fulfilling Martin's dream of open access. There will also be several losers, and that's where I'll be headed in tomorrow's column.

For now, just know that nearly any company creating content or improving the cyberspace experience is probably in a good position to thrive in the future. The biggest winners will be the sites that are already dominant in their fields like MySpace and Facebook in social networking, Google in search, or The Knot (NASDAQ:KNOT) in wedding planning. The Internet migration will find new users heading to the category killers first.

Ready. Aim. Wait.

Why free connectivity?

Microsoft is a Motley Fool Inside Value selection. The Knot and Google are Motley Fool Rule Breakers recommendations. Nintendo, eBay, and Amazon.com are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz sees strange shapes in the clouds, but not in cloud computing. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$116.63 (-0.57%) $0.67
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$282.30 (0.71%) $1.98
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$137.83 (-1.13%) $-1.58
eBay Inc. Stock Quote
eBay Inc.
EBAY
$48.00 (0.82%) $0.39
Logitech International SA Stock Quote
Logitech International SA
LOGI
$55.46 (-3.81%) $-2.20
XO Group Inc. Stock Quote
XO Group Inc.
XOXO

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
379%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.