This is one of the most important steps. Selection should be made over own feelings. There should items that you know or master (this doesn't apply to some people that are able to easily learn about nearly all). You should feel comfortable managing the subjects.
The niche or market segment size is important too. It would be very difficult to get a good position on search engines among, let say 1 million sites. Therefore the niche size or specificity has to be resized to a workable figure, for instance 100.ooo websites.
Research is usually made with keywords and direct searches. Select Internet market niches with me.