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.
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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.