Google's singular trick appears to be getting old.
That is, at least, the impression one gets after reviewing the company's fourth-quarter earnings and reactions from the market. While Google posted quarterly revenues of $10.58 billion, its highest ever for a single quarter (and 25 percent higher than the fourth quarter of 2010), Wall Street expected more, and Old G's shares dropped 9 percent after hours.
Analysts have cited a few reasons for being disappointed and, furthermore, worried about the year ahead. For starters, Google faces antitrust investigations into accusations that it manipulates search results; it's facing an intellectual property battle over Android; and if Google's acquisition of Motorola Mobility goes through, the company will then have to deal with the fate of owning a faltering handset maker. So, who's excited for 2012?
In addition to all of that, there's Google+. And, we suppose, whether you think of this as a plus (G+) or minus (G-) depends on which side of the Google+ fence you sit.
For example, while many are skeptical of activity there and the service's ability to be prosperous, Larry Page declared on the call that he's "super excited" to share the news that Google+ has 90 million registered users with 60 percent of them active daily. (Side note: Perhaps the real problem with Google is that it has a CEO who says things like "super excited" on earnings calls? Just a thought.)
But there's reason to be suspicious of that so-called "activity." It's unclear what "active" means to Google; and it's probably convenient that the company only recently manipulated its search results to promote Google+ content.
Not to mention, advertisers are still spending their money with Facebook, where engagement is strong. Google is playing catchup in a space where a leader still exists and continues to thrive.
The main problem with Google was perhaps best summed up by Jordan Rohan, an analyst at Stifel Nicolaus, who told The New York Times, "Google has big-company problems now, or more specifically, huge-company problems."
In other words, this isn't a startup we're talking about. It isn't a new company. It's a massive enterprise with great resources and great responsibility. With big businesses come big problems, and if Google is only prepared to continue to succeed in the same realm it always has, then it won't be able to keep up with itself and with its own growth. Continuing to bank on the same product that allowed it to emerge as the Internet giant it is today without tapping into new sources of real revenue, or finding financial success with its new products, is not a tactic that's going to sit well with investors.
At this point, the market is growing restless. And the pony Google's been riding for over a decade is looking tired.
— Nicole Ferraro , Editor in Chief, Internet Evolution