The 3 Real Winners Among Internet Stocks

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Unlike many Internet companies that exploded during the dot-com bubble, then quickly fizzled out without ever showing any semblance of value, some internet stocks in this sector today aren’t in nearly as much danger of living shortened lives.

But some of the flashy Internet stock companies still make me wonder.

For example, Facebook (FB) rose 140% over the past 52 weeks and is now supposedly worth more than $140 billion. If you place any merit on Princeton University and its recently released study, the online social butterfly is in the early stages of abandonment by users and stands to lose 80% of them by 2017. Facebook’s revenue growth of 60% in 2013 came as a result of mobile users, but without another segment to tap, that percentage will likely decrease as the years go by.

I’ve seen estimates for the fair value of Facebook stock as low as $12, a far cry from the current $57.

Here’s another : The quarter before Twitter’s (TWTR) IPO in November 2013, the social networking site lost $64.6 million, had a long history of not making a profit, yet was valued at $24 billion on Day One and $35 billion today … or 31 times projected sales. It’s not expected to make one cent in profit until 2015 at the earliest. Ah, but instead of losing 18 cents a share like it did in 2013, it is only projected to lose 4 cents a share this year.

I wouldn’t be putting my money in either Facebook or Twitter this year.  But here are three other big Internet companies who know how to redefine themselves in the face of fading fads, provide multiple and varied services, have a foothold (or at least a couple fingers) in China and turn profits:

Yahoo

YHOO stock, yahoo stockDespite its little email snafu a while back that had customers up in arms, $39 billion Yahoo (YHOO) has done an admirable job of providing a wide range of services worldwide.

In recent weeks, CEO Marissa Mayer has acquired two companies: Aviate, a startup with an application that cues your smartphone to bring up real-time relevant information; and Ptch, the DreamWorks animation mobile video newcomer.

What makes YHOO even more tempting are the company’s investments in China’s Internet giant Alibaba and Yahoo! Japan. Of the $40 billion in current market cap, about 55% or more derives from Asian investments.

LinkedIn

lnkd linkedin stockLinkedIn (LNKD) also has a Chinese connection. Although the site is in English only, LNKD is said to have more than 4 million Chinese users and is expected to make an announcement about rolling out its website in Mandarin sometime this year.

Unlike Twitter and Facebook, the $28.8 billion company provides a business—not social—tool that caters to companies looking for talent and potential employees looking for jobs.

LinkedIn also doesn’t rely on advertising for revenue. The only way to access the 200 million users is to buy a premium service; individuals wanting to post resumes don’t need to fork over money, but they do have to register with LinkedIn.

Google

goog google stockLast year just six companies comprised for more than 25% of the $1.5 trillion held by U.S. non-financial corporations, and Google (GOOG) was one.

With a $387.5 billion market cap, Google is, of course, a monster and staple of the Internet world. From search engine to business applications to retail to wearable devices to hardware, it constantly reinvents itself.

Recently, Google announced that it was buying Nest Labs for $3.2 billion in cash, a company that makes smart thermostats and smoke alarms. Go figure. Of course, we can’t forget about its Android mobile operating system, which controls 80% of the global smartphone market. At $1,138 per share, it is indeed expensive but it also happens to be the most valuable technology company in the industry.


Article printed from InvestorPlace Media, https://investorplace.com/2014/01/internet-stocks-yhoo-goog-lnkd-fb/.

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