It may seem unfair, with net profit up 41 percent from 2013 to $4.8 billion for the quarter. But instead of the $6.91 a share Google posted, analysts had expected $7.12. Revenue of $14.5 billion was $250 million below estimates.
Although shares did recover from an immediate drop in after-hours trading on Thursday, they were down $12, or 2 percent, to $523 in Monday afternoon trading (and are down nearly 11.5 percent over the past year). Investors are concerned about the company's core business, and a report that Yahoo (YHOO) was taking more U.S. search share didn't help.
According to Web analytics company StatCounter, Google fell below 75 percent U.S. search share in January with 74.8 percent, a first in more than six years. Yahoo climbed to 10.9 percent, and Microsoft (MSFT) Bing had 12.5 percent. The shift may not be large, but it crosses a psychological plateau for investors.
Furthermore, Google faces the same shift to mobile that challenges many Internet-based businesses. Traditional approaches to advertising don't work, and the rates companies can command on mobile are lower, driving down sales.
Google's 18.9 percent revenue growth last quarter is the lowest it has recorded in five years. More important, paid clicks -- the number of times people click on the ads, which results in advertisers paying Google -- hit 14 percent, also a five-year low and significantly below analyst expectations of 17 percent.
Even with all the pressure on revenue, Google has also increased its spending. Expenses are up sharply, which isn't helped by investments in a range of new endeavors, such as putting a big bet on Elon Musk's SpaceX or reportedly becoming a wireless carrier.
One of the criticisms of Google when Larry Page became CEO was that it had become distracted, with too many lines of business and products. Page sharply pruned back initiatives, but it may be that Google's culture has taken hold and encouraged an expensive expansion again.