I've said repeatedly in the past that Google (GOOG) has lost its way. Two years ago, it was essentially the technological leader, rivaled really only by Apple (AAPL). Now, the company has begun making moves that water itself down and are causing at least some users to become disgruntled.
Something like 96% of Google's income comes from advertising, and the vast majority comes from their search function. Without search advertising, Google becomes just another ad network like dozens of other advertising companies. They'd be a big company, but the bread and butter that differentiates it from other companies is that search function.
As for search advertising, any real challenge from any other company that can take really any substantial portion of search market share can have a huge impact on the long-term worth of the stock.
Bing (MSFT) and Facebook have already teamed up with the long-term goal of bringing more competition to Google. This is, hands down, the most important "Google killer" trend, because Bing is slowly but surely gaining market share.
And here's some more of the bad news for Google. My favorite billionaire -- or at least one of them -- Peter Thiel, said a few days ago, as reported and quoted from Business Insider:
"Google is not a tech company," Thiel said, arguing that Google does search and people think that no one else will come up with better search. "So investing in Google [is] betting against innovation."
Investing in Google is mostly a bet on search market not changing. At least investing in Apple and Amazon and other tech companies is a bet on change and innovation.
That's a horrible bet. And it's especially horrible because of how much Google has even changed it's own algorithm in the last 18 months. The Panda update changed 12% of all search results. Penguin changed another 3.1% of results.
And these are likely greatly understated, because such huge websites were impacted like Wikipedia, eHow.com, Hubpages, etc. Either way, even the mainstream statistics show us that at least 1-2 out of 10 results on every page has changed, on average. That means every page of results in Google is different.
That's a huge change. Some, including myself, don't like the changes and are now using Bing. That's just how the market works. It's constantly changing, and companies that aren't improving and innovating shouldn't be seen as long-term companies that are stable enough to get healthy profits.
I don't own a single share of Google. And for the reasons listed here, I never will, unless they have a fundamental transformation and find their way once again.