But with tax men surrounding the company in Europe, with regulators in Brazil trying to tell it who it must search and how much it must pay for the privilege, and with the U.S. FTC reportedly preparing an ultimatum to resolve antitrust complaints or face Microsoft-like legal action, it's no longer a question of whether the stock will retreat, but how far.
Even the company's most recent quarter is signaling trouble ahead. Adding Motorola's results to the mix put the top line into overdrive - up nearly 35% from the spring quarter - but they have taken a big bite out of net income, down one-quarter in the same period. Mountain View has been trying to "take the hit" on Motorola quickly, aggressively cutting staff and product lines, seeking just one or two home runs instead of a bunch of singles. It all makes sense, but if Google can't compete more effectively with its biggest OEMs - Amazon.com (AMZN), LG, Samsung (SSNLF.PK) - why did it bother taking over the company in the first place?
The legal troubles, especially those in the U.S., should be of greater concern. The FTC has been on the case 18 months. The company's rivals, like antitrust lawyer Gary Reback, are fighting hard against a settlement. That's political pressure.
But it's not just about the company's business practices. This is also a patent case. An FTC suit over how Google used the patents it got from Motorola would come just as the company is in court trying to extract money from Microsoft (MSFT) over those same patents. Motorola's patents on key mobile phone standards were considered a checkmate in the Android patent battle, but the value of that card seems open to question.
There are indications Google could do very well this Christmas, and its Internet Cloud infrastructure remains the best in the world. I remain a long-term bull on Google. But I do suspect we're going to get a much better entry point over the next month.