Roundtable: Google, Amazon, or Apple?

Tim Beyers: Google is the outperformer of these three, hands down. Bing has zing, but it's Google that users trust most. That's what Microsoft (Nasdaq: MSFT) found when it was still known as "Kumo" — users presented with results that were identified as from The Big G were rated higher than those derived from Bing. Brand matters.

So does the cloud. Google has retrofitted its Apps suite to work with Microsoft's Exchange and is positioning its Wave messaging system and Chrome browser as an operating system for Web-based computing, fed by a global infrastructure that could be as many as 1 million servers strong.

Matt Koppenheffer: I like all three of these companies, but whether it's horse racing, or equity investing, valuation matters and it's no good buying a good company at an inflated price.

Of the group, Amazon may have some of the best prospects for profit growth, but it also has the highest valuation by a considerable margin — enough that I'd quickly toss it from consideration. And while Google has the lowest valuation of the three (based on expected 2009 earnings) and continues to roll out new offerings, I don't know that I'm sold on the fact that the company has a long and clear runway to huge profit growth.

That leaves us with Apple, which seems to roll out one hit product after another and is bolstering a brand image that will help it sell more of its computers. Heck, although Google's gotten the recent pub, I could see Apple giving Microsoft a run for its money as the tech titan.

Alyce Lomax: I'm taking a Rule Breaker turn: Amazon.com is the best deal among these tech survivor types. True, Amazon's trading at a much higher multiple than either Google or Apple (48 times earnings!), but Amazon's the gold standard in innovation and evolution, so don't underestimate its power over the long haul.

Amazon disrupted bricks-and-mortar retailers like Borders Group and Barnes & Noble, and it's doing it again with the Kindle. It's found more and more ways to distribute digital content in addition to physical stuff (remember Amazon offering on-demand content through TiVo (Nasdaq: TIVO), for example).

Meanwhile, its continued focus on low prices resonates in good economic times and bad. It has negligible debt and copious cash on its balance sheet. Plus, unlike some company heads, Jeff Bezos doesn't seem prone to major fits of ego-tripping. (Bezos recently spent a week working — not visiting, working — alongside hourly employees in a Kentucky distribution center to see how it's done.) When I think of wicked smart and evolving, I think Amazon, and that's a nice moat to have.

Alex Dumortier: In terms of valuation, there is a wide gap that separates Amazon from Google and Apple, as the following table shows:

Is that gap fully justified by differences in fundamental characteristics and prospects of the businesses? In my opinion, the odds are against it.

At less than half Amazon's P/E multiple, I have to select Google as the best buy among these three tech titans. Normally, I'd couch that sort of statement in extremely guarded terms — the tech industry lacks predictability.

However, I take some comfort from Berkshire Hathaway (NYSE: BRK-A) Vice Chairman Charlie Munger, who had this to say about Google's "moat" (competitive advantage) in May: "Google has a huge new moat. In fact, I've probably never seen such a wide moat." Berkshire Chairman Warren Buffett added that Google's search-driven advertising business is "incredible … I don't know how to take it away from them." That's a remarkable endorsement from two investors with near-unparalleled understanding and experience of what makes a business durably great.

While we're on the subject of best buys in this sector, one tech titan that has been dismissed by investors looks interesting. Over the past five years, eBay (Nasdaq: EBAY) has massively underperformed all three of our roundtable stocks. However, at less than 12 times estimated 2009 earnings per share, the online commerce giant looks ready to reverse that trend.

Anders Bylund: Apple did fine with Steve Jobs on medical leave. Amazon is a leading online retailer — but also launching headlong into the cloud-computing space. Over time, I can see that business becoming at least as important as the main retailing operation. Both are fine companies and should outperform the S&P 500 over the next five years.

But Google will crush that benchmark. The venerable Mr. Market seems to think that Big G is all about online search, and that a changing of the guard would kill the company. That's simply not the case. Microsoft can Bing its heart out, and even if it does make headway on the search engine front — and that's a huge "if"– Google's advertising muscle will keep the cash flowing into Mountain View, Calif. But Google's stock is priced as if online advertising were on its deathbed already.

Rick Munarriz: I'm a big fan of all three companies — and stocks — but I have to go with Apple. Google and Amazon are the leaders in their fields, but they are vulnerable. The recent success of Bing proves that even a dinosaur like Microsoft can make a dent in search. Amazon has a sticky hold on its customers with its Prime memberships, but it's a moat that a committed bricks-and-mortar giant should be able to duplicate.

Apple, on the other hand, is the one company that folks are willing to pay a premium for their products. MacBooks cost more than equivalent laptops. iPods cost more than other portable media players. If Google wasn't free — or if Amazon was more expensive than other online retailers — would either company be relevant? Apple has, is, and will be.

Three Fools are with Google, two with Apple, and one with Amazon.