The stock market traffics in absolutes, with little regard for the sort of complexity and equilibrium that moves us toward long-term understanding.
Take Google's (GOOG) second-quarter earnings, for instance, which were announced Thursday to great fanfare. The word "soared" was often seen in headlines. Wall Street analysts and traders nodded appreciatively.
Fair enough, to a degree. At least, over the short haul.
After all, seen through the lens of a macroeconomic picture, Google's earnings provided considerable relief. Back out the Motorola Mobility Holdings and currency issues and Google's earnings hit the mark, thanks to the fact that overall clicks on Google's search ads jumped 42%.
That was a function of perhaps a slightly better economy than expected -- at least online -- and good operational execution from Google, clearly a company with the knack, as well as relatively weak competition from the likes of Yahoo (YHOO) and Microsoft (MSFT). Google ads have been more alluring, and that's a good thing. In the near future, that's bound to help.
But here's the long-term rub, and it's bound to eventually cause a rash: Google's ad rates are dropping, big time. That's a clear function of the smartphone-induced increase in consumers accessing the Web on the run.
Seen through the lens of the long-term prospects of Google, this is legitimate cause for concern.
You think smartphones are going away? Wishing the trend of mobile Web access away is like wishing PCs back into prominence. In other words: Good luck, but it's akin to trying to pin down a cloud.
That's why amid all the talk of hitting numbers and soaring earnings, you should cast an eye on Google's long term. There, Google's prospects get a bit more complex. Good? Bad? Maybe this one is, all told, somewhere lost in the middle.