source: thedailyspain.com

In this article, we will look at the top-10 Internet companies in the US by their 2016 revenues. We will provide the revenues, year-on-year (YoY) revenue growth, net profits, and net profit margin of the top-10 companies for the last five years. At the end of the article, we will briefly share our research methodology and provide revenues and profits insights about the US Internet industry.

US Top-10 Internet Companies Revenues and Profits

The top-10 Internet companies in the US by 2016 revenues are: Amazon, Alphabet (parent company of Google), Facebook, Paypal, Priceline Group, Ebay, Netflix, Expedia, Yahoo, and Wayfair. The revenues and profits details of these companies are as follows:

1. Amazon Com Inc

source: hdqwalls.com

Amazon is ranked no. 1 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Amazon makes money primarily by selling consumer products and subscriptions through its North America and International websites. In addition, Amazon also sells cloud services for on-demand delivery of IT resources and applications via Internet. For more details on the Amazon revenues by its business segments, please see our article on ‘Amazon Revenues and Profits Analysis – 2017 Update.

Amazon generated $136.0 billion of revenues during 2016, up 27.1% yoy, from $107.0 billion in 2015. Amazon reported a net income of $2.4 billion during 2016 and the net profit margin was 1.7%. Amazon revenues, revenue growth, net income, and net profit margins for the past five years are presented in the diagram below.

2. Alphabet Inc

source: teknoyo.com

Alphabet is ranked no. 2 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Alphabet is the parent company of Google. All non-Google businesses are referred to as ‘Other Bets’. In 2016, they contributed less than 1% to the Alphabet’s total revenues and they were not profitable. So, Alphabet generates most of its revenues and profits from Google. Google makes money primarily by selling online advertising over Google owned and operated properties and over Google Network member’ websites. For more details on the Google business model, please see our article on ’How Google Makes Money?

Alphabet generated $90.3 billion of revenues during 2016, up 20.4% yoy, from $75.0 billion in 2015. Alphabet reported a net income of $19.5 billion during 2016 and the net profit margin was 21.6%. Alphabet revenues, revenue growth, net income, and net profit margins for the past five years are presented in the diagram below.

3. Facebook Inc

source: wallstreetpr.com

Facebook is ranked no. 3 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Facebook is the world’s leading online social networking platform that helps its users stay connected with each other through a suite of web and mobile apps. Facebook offers its users web and mobile apps to help them connect, share, discover, and communicate with each other. Facebook provides access to these apps free of charge to its users. Facebook generates revenue by selling advertisement placements over its web and mobile apps to the marketers who want to target Facebook users. Facebook generates majority of its revenues from advertising. For more details on the Facebook business model, please see our article on ’How Facebook Makes Money?

Facebook generated $27.6 billion of revenues during 2016, up 54.2% yoy, from $17.9 billion in 2015. Facebook reported a net income of $10.2 billion during 2016 and the net profit margin was 37.0%.

4. Paypal Holdings Inc

source: seekingalpha.com

Paypal is ranked no. 4 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. PayPal enables individuals and businesses to send and receive payments online easily, quickly, and securely. PayPal connects with the financials institutions around the world and allows the consumers to make purchases using a broad range of payment methods. Consumers can fund their PayPal accounts by credit card, debit card, or electronic fund transfers from their bank account. PayPal also offers PayPal Credit, where a bank or other licensed lender issues credit products and extends credit to the customers. PayPal derives majority of revenue from a take rate on the net Total Payment Volume (or net TPV) that it enables.

Paypal generated $10.8 billion of revenues during 2016, up 17.2% yoy, from $9.2 billion in 2015. Paypal reported a net income of $1.4 billion during 2016 and the net profit margin was 12.9%.

5. Priceline Group Inc

source: logolynx.com

Priceline Group is ranked no. 5 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Through its online travel companies (“OTCs”), the Company connects consumers wishing to make travel reservations with providers of travel services around the world. The Company operates six primary, independently managed brands: Booking.com, priceline.com, KAYAK, agoda.com, RentalCars.com, and OpenTable. The Company generates revenues from reservation commissions, customer processing fees, and online advertising placements.

Priceline Group generated $10.7 billion of revenues during 2016, up 16.5% yoy, from $9.2 billion in 2015. Priceline Group reported a net income of $2.1 billion during 2016 and the net profit margin was 19.9%.

6. eBay Inc

source: hipwallpaper.com

eBay is ranked no. 6 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. eBay enables global commerce and payments on the behalf of users, merchants, retailers, and brands of all sizes. eBay provides technologies and services that enable users and merchants worldwide to offer their inventory for sale and buyers to find it, buy it, and pay for it. eBay generates revenues from the transactions it successfully enables. In addition, eBay also generates revenues through marketing services, classifieds, and advertising. For more details on the eBay business model, please see our article on ‘How eBay Makes Money?

eBay generated $9.0 billion of revenues during 2016, up 4.5% yoy, from $8.6 billion in 2015. eBay reported a net income of $7.3 billion during 2016 and the net profit margin was 80.9%. eBay 2012 revenues consist of revenues from Paypal and Enterprise segments. During 2015, eBay separated Paypal into a separate company and sold its Enterprise business.

7. Netflix Inc

source: wallpapercave.com

Netflix is ranked no. 7 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Netflix is the world’s leading provider of streaming media delivering TV shows and movies over the Internet to its subscribers. Netflix subscribers can watch the streaming video content on nearly any of the Internet connected devices such as PCs, MACs, Smartphones, Tablets, Game consoles, Blu-ray players,  television set-top boxes, and Smart TVs. In addition, in the United States, Netflix offers delivery of DVDs at home to its subscribers. Netflix generates revenues through the monthly membership fees for its content streaming services and DVD-by-mail services. For more details on the Netflix business model, please see our article on ‘How Netflix Makes Money?

Netflix generated $8.8 billion of revenues during 2016, up 30.3% yoy, from $6.8 billion in 2015. Netflix reported a net income of $0.2 billion during 2016 and the net profit margin was 2.1%.

8. Expedia Inc

source: thetravel.com

Expedia is ranked no. 8 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Expedia in an online travel company. It operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. Expedia Core OTA segment provides a range of travel and advertising services to its customers across the world, through a variety of brands, including Expedia.com, Hotels.com, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch websites. The Egencia segment provides managed travel services to corporate customers across the world. The HomeAway segment operates an online marketplace for the vacation rental industry.

Expedia generated $8.8 billion of revenues during 2016, up 31.5% yoy, from $6.7 billion in 2015. Expedia reported a net income of $0.3 billion during 2016 and the net profit margin was 3.2%.

9. Yahoo! Inc

source: warriortradingnews.com

Yahoo! Inc is ranked no. 9 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Yahoo! is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo generates revenue from display advertising, search advertising, and other sources. Display advertising revenue is generated from the display of graphical, non-graphical, and video advertisements. Search advertising revenue is generated from clicks on text-based links to advertisers’ websites that appear primarily on search results pages, and from a revenue sharing arrangement with Yahoo Japan for search technology and services. Other revenue consists of listings-based services revenue, e-commerce transaction revenue, royalties, patent licenses and fees revenue.

Yahoo! generated $5.2 billion of revenues during 2016, up 4.0% yoy, from $5.0 billion in 2015. Yahoo! reported a net income of -$0.2 billion during 2016 and the net profit margin was -4.1%.  

10. Wayfair Inc

source: businesswire.com

Wayfair is ranked no. 10 in the ‘US Top-10 Internet Companies by 2016 Revenues’ list. Wayfair is one of the world’s largest eCommerce website for the home goods. Wayfair offers one of the largest online selections of furniture, décor, decorative accents, housewares, seasonal decor, and other home goods through five distinct brands: Wayfair.com, Joss & Main, AllModern, DwellStudio and Birch Lane. Wayfair generates net revenue from product sales through its five distinct sites and through sites operated by third parties. Wayfair also earn revenue from third-party advertisers that pay based on the number of advertisement related clicks, actions, or impressions for ads placed on its sites.

Wayfair generated $3.4 billion of revenues during 2016, up 50.2% yoy, from $2.2 billion in 2015. Wayfair reported a net income of -$0.2 billion during 2016 and the net profit margin was -5.8%.

US Internet Industry Revenues and Profits

All the analysis in this article is from our proprietary financial database of the top 3000 public companies in the US. We call it R&P Screener. It helps investors and B2B sales & marketing professionals “quickly and easily” identify the revenue growth leaders/laggards, most/least profitable companies, and top-n (top-5, top-10, top-20 etc.) companies by revenues, revenue growth, net profits, net profit growth or net profit margin.

R&P Screener ranks the top 3000 public companies in the US by their 2016 revenue. The combined revenues of the US top 3000 companies were $14.49 trillion during 2016. The combined net income was $1.03 trillion. Here are some brief insights about the US top 3000 companies from the R&P Screener (April 2017 Update):

source: techdrivein.com
  • The revenues are concentrated in the mega corporations (companies with revenues greater than $50 billion). There were 54 mega corporations in the top 3000 companies in the US during 2016. Those 54 mega companies combined revenues during 2016 were $5.76 trillion. This represents a share of 39.7% in the total revenues of $14.49 trillion of the 3000 companies. There were 1610 medium-size companies & their combined revenues during 2016 were $594 billion.
  • Just like the revenues, the profits are also concentrated in the mega corporations. The 54 mega corporations had a combined net income of $422 billion during 2016. This represents a share of 40.9% in the total net income of $1.03 trillion of the 3000 companies. On the other hand, 1610 medium-size companies combined net income during 2016 was just $23 billion.
  • There were 2224 companies (74.8% of the total) with positive net income and 756 companies (25.2% of the total) with negative net income during 2016.
  • There were 1985 companies (66.2% of the total) with a positive revenue growth and 1015 companies (33.8% of the total) with a negative revenue growth during 2015-16.
  • There were 1236 companies (41.2% of the total) with a positive net income growth and 800 companies (26.7% of the total) with a negative net income growth during 2015-16. For 964 companies (32.1% of the total), we could not compute net income growth because their net income was negative during 2015 or 2016.
  • California, Texas, New York, Illinois, and Massachusetts are the top five states in terms of number of companies with headquarters locations. A total of 1309 companies (43.6% of the total) have headquarters in these states. The combined revenues of these companies were $5.96 trillion (41.1% of the total) during 2016.

For detailed insights about the top 3000 companies, please see our article on Top-10 insights from revenues and profits analysis of Top-3000 companies in the US.

Of the 3000 companies, 406 public companies are in the technology sector. The combined revenues of those companies were $1.66 trillion during 2016 and the combined net profit of those companies were $192.5 billion. The technology sector comprises of six key industries: Computer Systems and Peripherals, Software, Semiconductor, IT Consulting and Outsourcing, Networking Equipment and Services, and Others.

Of the 406 companies in the Technology sector, 74 companies are in Internet industry. The combined revenues of companies in the Internet industry were $358 billion during 2016 and the combined net profit of those companies $44 billion.

The Internet industry includes Internet-based businesses providing products and services such as search engines, social networking, web hosting, email, domain name registration, and eCommerce. It also includes industry information/services portals focused on different sectors such as Financials, Automotive, Travel, Real Estate, Media, and Publishing.