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Analysts Cautious About Google's Future

  • Reuters, Thursday, January 26, 2012 11:57 AM

In the wake of missing financial goals for the fourth quarter, Web watchers are taking a long hard look at Google and its future prospects. “Analysts say Google is simply putting its fingers in too many pies,” reports Reuters. “Forays into television, Android mobile phones and music sales in the past two to three years have left the investment community straining to recognize the company.”

The assessment shouldn’t come as a shock to Google, however, as it has recently sought to streamline its businesses -- particularly since the return of co-founder Larry Page as CEO. Adding to analyst concerns was a drop in Google's search advertising rates in the fourth quarter, as well as uneasiness over the company’s proposed $12.5 billion acquisition of smartphone maker Motorola.

As such, “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+,” Reuters writes. Said Walter Price, a portfolio manager at RCM Capital Management: "Right now, people are skeptical about those bets paying off.” Google's managers, in Price’s words, "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."

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