5 companies grab 70% of online dollars

Internet giants such as Facebook and Amazon take in $300 billion

The Internet was supposed to democratize and open up information, commerce and communication. But the spoils are going to a relative few.

Now that social media giant Facebook has reported its quarterly profit, investors can see how lucrative Internet business has become for the industry’s winners. Just five companies in the Internet Software and Services and Internet and Catalog Retail industries within the Russell 3000 index, including Amazon, Google parent Alphabet and Facebook, collected 70% of the industry’s more than $300 billion in revenue the past 12 months, according to a USA TODAY analysis of data from S&P Capital IQ.

Even that statistic masks how concentrated the Internet business is. Amazon and Alphabet together hauled in 57% of the total revenue generated by the Internet companies over the past 12 months.

Most of the massive digital opportunity has been grabbed by a small cadre of online behemoths that continue to get bigger.

Investors are realizing that if they want a piece of the Internet and technology revolution, they’d better stick with the big companies that keep getting stronger. The big three Internet companies — Amazon, Alphabet and Facebook — command more than 70% of the industry’s total market value of $1.5 trillion.

Smaller players are falling further be- hind. Even Yahoo, which some people continue to think of as an Internet titan, brought in only 1.6% of the Internet indus- try’s revenue over the past 12 months, and online streaming service Netflix brought in 2.1%.

This analysis has its limitations. It includes only publicly traded companies, leaving out private Internet companies that might be relevant. There are other broader technology companies that are active in online business but not classified as Internet companies. Microsoft, for instance, is not in the Internet industry but is a key rival to Amazon for cloud services for businesses, and its Bing search engine holds about 20% market search in U.S. searches. The same could be said about gadgetmaker Apple, which has become a peripheral player online through its dominance in smartphone sales, at least in the USA.

The numbers show why the Internet giants are easily in the position to crush any small companies that stand in their way.