Industry Description
The Zacks Internet - Content industry comprises providers of video encoding platforms, personal services, Internet content and information, staffing and outsourcing services, publishing, capital markets, media-based, home service, digital insights and measurement, stock photo, video and music licensing, and online travel companies. The industry is witnessing a rapid change in consumer behavior and ongoing digitalization. Advertising is a major revenue source for industry participants. Therefore, these companies are trying to expand their digital presence to win customers. They are also expanding their presence across social media, display and connected TV and search. Apart from the United States, a number of companies in this industry are located in Israel, the U.K., Germany, Russia and China.
3 Trends Shaping the Future of the Internet - Content Industry
Demand for Digital Offerings Growing: The industry is characterized by rapid technological change, frequent product and service introductions, and evolving standards. An expanding range of mobile, digital and cloud-based offerings by industry participants is a major growth driver. The proliferation of smart devices and the increasing automation of the application development process bode well.
Industry Prospects Driven by Ad Spending Rate: Industry participants are focusing on marketing efforts to boost traffic to websites. Advertising and subscriptions are major revenue sources for these companies. The industry is dependent on consumer spending trends, making holiday spending a major deciding factor. However, macroeconomic challenges are expected to hurt ad spending in the near term.
Increasing Regulations Mar Prospects: Industry participants involved in online search and other social networking activities are increasingly facing regulatory pressure, particularly in China and the European Union (“EU”). The China government has a number of regulations related to direct advertising, which is a prime revenue source for these companies. The implementation of the General Data Protection Regulation in the EU adds to the concerns. Enactment of the Digital Markets Act (DMA) in the EU aims to prevent large online platforms that connect users with content, goods, information and services from abusing their market power. The DMA adds to the headwinds faced by Internet content providers in the EU.
Zacks Industry Rank Indicates Bullish Prospects
The Zacks Internet - Content industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #55, which places it in the top 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since Nov. 30, 2025, the Zacks Consensus Estimate for the industry’s 2026 earnings has moved up 4.1%.
Given the bullish industry outlook, there are a number of stocks worth following. But before we present the stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock market performance and valuation.
Industry Lags S&P and Sector
The Zacks Internet - Content industry has underperformed the broader Zacks Computer and Technology sector, as well as the S&P 500 composite, over the past year.
The industry has dropped 40.3% over this period compared with the S&P 500 sector’s appreciation of 16.8% and the 21.8% rise of the broader sector.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month price-to-sales ratio (P/S), which is a commonly used multiple for valuing Internet – Content stocks, we see that the industry is currently trading at 3.66X compared with the S&P 500’s 6.61X and the sector’s 8.32X.
Over the last five years, the industry has traded as high as 6.6X and as low as 3.33X, the median being 4.98X, as the charts below show.
Trailing 12-Month Price-to-Sales (P/S) Ratio
2 Internet Stocks to Buy
RELX: This Zacks Rank #1 (Strong Buy) company is benefiting from the ongoing shift in business mix toward higher growth analytics and decision tools that deliver enhanced value to its customers.
Business Services, which represents roughly 40% of divisional revenues, is benefiting from strong growth in Financial Crime Compliance and Fraud & Identity solutions. RELX is also benefiting from strong Insurance solution business.
The Zacks Consensus Estimate for RELX’s 2026 earnings has been steady at $1.95 per share over the past 30 days. RELX shares have declined 41.9% in the past year.
Price & Consensus: RELX
Yelp: This Zacks Rank #2 (Buy) stock is benefiting from higher ad spending, an increase in Paying Advertising Locations and an improvement in the non-term customer retention rate. YELP is witnessing an acceleration in consumer traffic across app-unique devices. A significant improvement in cumulative reviews is encouraging as well. Its sustained focus on expanding the product portfolio is likely to drive its revenues further.
Yelp's continued investment in AI and machine learning is expected to boost engagement and loyalty on its platform, contributing to sustained revenue growth. The Zacks Consensus Estimate for YELP’s 2026 earnings has been steady at $2.39 per share over the past 30 days. Yelp shares have dropped 39.3% in the past year.
Price & Consensus: YELP
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
