Many companies tried to dominate the business of Web searching back during the Internet bubble, but only the trio of Google ( GOOG), Microsoft ( MSFT) and Yahoo! ( YHOO) emerged as the true 800-pound gorillas in the space. Unfortunately, that's a lot of gorillas, even in a space as vast as the Internet. Mitchell Rubin, portfolio manager of the $141 million ( BIOPX) Baron iOpportunity fund, says the shift in advertising dollars from traditional to online media will keep all three giants well fed for the time being. But he says Microsoft may have trouble keeping pace in the long run and could be better off simply sticking with software. Rubin's fund, which specializes in Internet-related stocks, is up 2.64% year to date, and has returned 5.3% annually over the past five years. TheStreet.com recently chatted with Rubin to find out more about his Internet strategy and ask him about that long-awaited fourth-quarter tech rally. What is your stock-picking strategy? We look for companies with open-ended opportunities created by the Internet or information technology. The fund is diversified in that we own companies in a lot of different industries, but the basic underlying theme is that the future profits of the firm will be driven by the adoption of the Internet or information technology. With that as a screen for the universe, we look for great companies with a competitive long-term advantage and strong management. We also seek companies with long-term earnings power that the market may not currently be recognizing. In the end, our goal is to find stocks that can double in the next three to five years. It's getting close to Thanksgiving. Where is that fourth-quarter technology rally we kept hearing about earlier this year?
We don't give the seasonality of the sector much thought. We worry about owning companies that we are going to make doubles and triples on over the next three to five years. So if they rally at Christmas or slump in the summer, we don't worry too much about that.