According to the Department of Homeland Security (DHS), the Internet sector is a collaboration between the information technology and communications sectors. It deals primarily with virtual applications such as information technology systems and the transmission of communications. Companies belonging to this sector specialize in the creation, distribution and exchange of digital information. Internet-based companies such as Amazon, Google, Facebook, Ebay and CISCO are part of this sector. As a hybrid of two critical infrastructure sectors, the Internet sector can be considered a complex and diverse environment that serves an essential function in society.

In the late 1990s and early 2000s, the Internet sector in the United States formed what came to be known as the Dot Com Bubble. The bubble's growth began in April 1997 and ended in June 2003, according to Business Insider. During this period, several Internet-based companies were founded, and their stock prices grew rapidly. WorldCom, InfoSpace, Geocities and Lycos were among the period's key companies. Investors were so confident in the success of emerging technologies that they failed to consider key metrics such as price to earnings (P/E) ratio in their zeal to invest. This contributed to high stock prices, free spending and an eventual market crash. The stock market lost $5 trillion of its value between 2000 and 2002. In the aftermath of the boom, leaders in the Internet sector consolidated and grew their companies, so the sector now bears a closer resemblance to other market sectors in the U.S

The Internet sector is a portal for many different products and services, so it is often informally divided into different subsectors. These include software services, e-commerce, service delivery, content, hosting and broadcasting. Several mutual fund companies offer exchange-traded funds (ETFs) that target specific Internet subsectors for investors who wish to invest in more specialized Internet services funds.

Because the information technology side of the Internet sector is continually changing, it is difficult to assess its weaknesses and threats. This contributes to high volatility. However, this volatility may be somewhat offset by the sector's communications side. Communications technologies are consistently in demand, making the sector less vulnerable to economic changes. Both of the Internet's contributing sectors offer opportunities for growth through the expanding development and use of cloud computing, big data, wireless communications and smart devices. The Internet sector is also capable of producing high dividend yields for investors through its interconnectedness with the communications sector.

The Internet belongs to the quaternary sector of the economy according to the three-sector theory of industry. This sector deals with knowledge-based industries such as communications technologies, computing and research. The Internet is also a portal for services such as wholesaling, retailing, entertainment and information generation. This shows that there is some overlap between the quaternary sector and the tertiary sector, which is service-oriented. For this reason, some economists attribute the Internet attributed to the tertiary sector.

  1. What is the average price-to-earnings ratio in the Internet sector?

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  2. What are examples of popular companies in the Internet sector?

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  3. How does debt affect a company's beta?

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  4. What is the Difference Between an Industry and a Sector?

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  5. What happens to the intangible assets of a company when it is bought or sold?

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  6. What is the average profit margin for a company in the telecommunications sector?

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