• Business Week, Thursday, February 1, 2007 10:45 AM

Google crushed earnings again, but Wall Street wasn't impressed, as shares fell about 1 percent in after hours trading. One percent is no big deal, but the fact that the search leader could nearly triple its profit from a year ago, beat all expectations, and not spark a stock surge is evidence that investors are spoiled--a bad thing for Google.

Two-and-a-half years after going public, Google is still a one-trick pony. This disregards the fact that the Web giant has gotten much better at generating revenue from search, its core business. Naturally, CEO Eric Schmidt piped on during the earnings call about how the present and future of Google is still search--the company's projected to capture two-thirds of the market this year.

For advertisers, the benefits of search are expanding. They are now starting to see the branding benefits of Google. In recent years, the company has started selling display; one day, it will broadly sell video. Indeed, Google's goal is to use its technology to deliver ads to every available medium. It's moving aggressively into radio, print and TV, but its also trudging ahead in developing its online video unit YouTube into a content delivery platform to sell ads on.

Maybe investors balked because all of this is still future-talk. After all, Google still makes money from one source that surely can't be a source of growth forever.

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