Investors Aren't Sure They Know What Google's Doing Either

One way to look at several of Google's recent moves, from the standardization of its data privacy policies to the inclusion of social intelligence in its search results, is to chalk them up to the relentless pursuit of profit. This story would suggest that Google is trying to improve its bottom line despite (some) user opposition to its new strategies.

So, one would expect that Wall Street would look at such behavior and say, "Bully to you, Google!" But that's not what's happening. Reuters' Alexei Oreskovic has a nice story out about how investors are as confused as the rest of us about what Google is trying to do.

Some are wondering if Google has a clear strategy for generating revenue and growth out of a plethora of fledgling initiatives, from Android to its Facebook wannabe, Google+, especially since Page and management refuse to offer guidance.

"Right now people are skeptical about those bets paying off," said Walter Price, a portfolio manager at RCM Capital Management, referring to Google's efforts outside its flagship search business.

Google's managers "get on a conference call and they're super enthusiastic about their future, and yet you look at the (stock's) multiple and the way the stock is treated, and people don't share that enthusiasm," said Price, whose firm owns Google shares.

What's interesting is that Google CEO Larry Page has been shutting down a lot of Google's goodwill-generating but revenueless products. "More wood behind fewer arrows," is actually the term they use to describe this process. However, the new strategy hasn't generated better arrow flight. (Is that the right way to extend the metaphor? Or does putting more wood behind fewer arrows generate even more wood rather than longer distance?)

In any case, let's also be real here: Google is sitting on a $45 billion pile of cash thanks to its cash-printing search display ad business. If the company's data collection and social stuff just don't destroy that core business, the company is going to be fine. Because, minor media outcry aside, there are no real signs that people have stopped Googling when they Google something.