What's Pushing Down Google's Stock Price?

Google's shares have continued a three-month retreat that has pushed them down 4%, compared to a 5% improvement for the NASDAQ.

It has occurred to investors that the same issues that hurt Google's share price a year ago have not gone away.

Google may retain its position as the No.1 search company in the world. It has two-thirds of the U.S. market, but America is not a rapidly growing market.

Google has still had little success in China, the world's largest nation based on Internet use. Among the 600 million people online in the nation, almost all use local search engine Baidu. Some observers believe that the Chinese government has blocked Google's advance. That belief will not help the company much. The People's Republic will do as it pleases. Google also has a weak presence in India and Russia, which limits its global growth prospects.

Two things were critical to the recovery of Google's stock last year. The first was relatively good earnings. They are "relative" to the extent that Google's growth now slows each year. The other cause for enthusiasm about Google's prospects is the amazing success of its Android operating systems, which has taken the smartphone business by storm. Android now has a larger market share than the Apple or Research In Motion operating systems.

But, investors realize that Google has not set out a clear case for why Android will make money. The tenuous argument is that Android will help establish Google as the de facto search engine on mobile devices. That probably would have happened without the costs of Android as people moved their search habits from PCs to smartphones.

Google's stock price is down because Wall Street sees that its future has not changed at all in the last year.

Presented by

Douglas A. McIntyre

Douglas McIntyre is editor of 24/7 Wall St.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In