Where is Google Screwing Up?

Multiple large technology companies reported today, and Google GOOG looks like the biggest failure. Intel INTC, IBM IBM, and Microsoft MSFT all reported relatively positive earnings, potentially indicating that information technology is holistically doing well.

Google is almost a conglomerate, operating with diverse revenue streams. It manages a multitude of products, although its most obvious offering is its website, www.google.com. According to Google executives, the cost per click of its ads declined by 8%, resulting in decreased revenues for the firm.

Ultimately, Google's revenues and net income declined in the last quarter, meaning that its profits and costs both took a hit. According to the firm, revenues from partner sites as well as global affiliates dropped quite a bit. What this may mean is that Google's attempt to globalize its platform is slowing in growth. While this is not necessarily the worst news, it has still disappointed Wall Street analysts, driving the stock price down to almost 10% in after-hours trading.

What may have also hurt Google in the last quarter is the fact that it added over 1,000 people to its workforce. Growing from 31,353 to 32,467, Google's staff may account for a significant amount of costs. For example, if each person made on average $10,000, the total added cost would amount to about $10 million.

More realistically, the average compensation is a multiple of that figure. Google missed revenue estimate by about $280 million, so compensation could have definitely exacerbated the bottom line's performance in the last quarter.

Intel, IBM, and Microsoft all reported one thing in common. Their globalization efforts seem to be paying off. While some aspects may not be positive, the collective effort appears to be positive for each respective company.

In fact, Intel came out to say that its factories are "fully loaded," frantically producing every product that it can. The fact that demand is so high for its products may mean that consumers are increasingly trying to get in on supercomputing. While some may believe that Google should be a part of the feeding frenzy, the companies efforts could be misguided.

Google is a powerhouse that consistently has a significant impact on the internet and computing in general. While its competitors seem to be performing well, Google may be lacking in various areas that present opportunities for profitability. For example, Google may want to restructure its efforts to bolster international growth. Ultimately, investors will want to stay on top of Google's corporate announcements in order to figure what corporate developments will be made.