The deep web could make fortunes for some investors.
There are profits to be made from the 'deep' web, but detailed research is going to be crucial if you are to make the most from this opportunity.
What is the deep web?
The 'deep' or 'invisible' web is that area of the world wide web currently inaccessible to standard search engines such as Google. It is estimated to be approximately 500 times larger than the ordinary part of the Internet that is indexed by standard search engines.
Take a look at Freenet (which is a closed section of it) to get some idea of what is available. Yes, there's a lot of undesirable stuff there. But there are also university archives and material that offers a potentially rich fund of knowledge of topics as diverse as nanotechnology and 3-D television.
Indeed, trawling around Freenet reminded me of what the world wide web looked like in the mid-90s, populated mostly by minority interests and geeks of every description.
Of course, the important question from our point of view is how can you profit from it? As an investor I can see two main ways.
Direct investment
You could invest in a company that helps those accessing information or markets services to the audience served by the deep web. This would include everyone from software vendors to specialist start-ups.
There are a few web search engines that are trying to mine the information in the deep web. They include: DeepPeep, CompletePlanet, Kosmix, Turbo10 and Wolfram Alpha. They're mostly private companies but when if one of these becomes dominant it is pretty likely to be floated -- or perhaps Google will gobble it up.
If you have a keen interest in this area, it is also possible to invest in technology that is going to indirectly help open up this 'invisible web'. Let me cite one area that I think holds promise. I reckon analytics programs that can successfully measure the response of ad campaigns to the deep web community or successfully trace browsing habits in these areas will make their owners/investors a lot of money.
However, predicting which companies out of the thousands out there will ultimately benefit from developments is an extremely tricky area to get right. For every Amazon, there are thousands of failures.
It is therefore probably safest to stick with existing companies that are in this space. Major producers of anti-virus programs, such as McAfee, and analytics programs, such as Adobe, will probably be in a position to buy up small rivals that come up with novel ways of exploiting these currently dark areas of the web.
A research tool
An easier path to profits is probably to use the deep web as another research tool for stock selection. There is a mass of research material where you can locate specialist information on quoted companies.
As usual, the material in English is dominated by our cousins across the Atlantic, so there is much more useful information on US stocks. However, there is material on UK shares there too. It just takes a lot of searching for.
Among the vast databases of financial information, there are also useful tit-bits and unattributable gossip that are of interest -- information that could help you avoid a costly mistake but which, if published in the mainstream media, would get their authors sued.
Of course, it needs time and dedication to trawl through the mass of material out there. The hard work -- which I have still to do I admit -- is to somehow organise your pick of this material.
Be warned though, once you start investigating the deep web it is like traversing a hidden continent. You'll start searching for one thing and end up finding lots of other facts that are fascinating.
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