Google, last three yearsIt seems bizarre when thinking about it, but Google Inc. is now a stock stuck in a trading range.

The company’s earnings report, viewed as a disappointment after the Internet-search giant cautioned about economic weakness for the first time (even bringing on the firm’s chief economist to talk macro issues on its conference call), has shares sagging, down $47.03 to $486.04, or 9% Friday.

After its stratospheric rise to a 52-week high of $747.24, reached Nov. 7, 2007, the stock has fallen sharply, and has spent the last couple of months bouncing between about $480 and $600 a share.

“It’s a great example of momentum investors getting out of a name that doesn’t have the upward momentum that people want,” says Kim Caughey, senior investment analyst at Fort Pitt Capital Group in Pittsburgh. “The economy isn’t giving them a tailwind, and international growth is good, but not enough to overcome the trend which is slowing growth.”

Part of the dissatisfaction from investors relates to Google’s reliance on advertising-based revenue for most of its growth, and its rate of growth for paid clicks on ads is slowing, notes Ben Worthen at the WSJ Business Technology blog. “Given Microsoft’s struggles turn a profit from search and Google’s announcing results that make it look like a real company and not the U.S. Mint, maybe it’s time we stopped thinking about search as Internet equivalent of an ATM,” he writes.

And while Google is likely to continue to pull advertising away from traditional media outlets, this trend won’t continue forever. Its ability to do so for as long as it has enabled investors to use a “buy high and sell higher” strategy, Ms. Caughey says, but when the growth story falters, this type of trade stops working.

Perhaps investors are just coming to grips with that, writes Sean Udall, on Minyanville.com, who says the “bar and expectations are just out of the world for the company. Google’s days of posting quarterly EPS crushes are gone.”

This is why analysts at BMO Capital Markets suggest that rallies aren’t to be trusted for long. “We continue to view GOOG as range-bound with higher likelihood for trading returns achievable when accumulating below $480 and reducing positions in the above $550 [range],” they write.