Google Has Major Headaches Going into 2015

Google Plans Kid-Friendly Services

TIME GOOGLE is COMING FOR YOUR CHILDREN The Register Comment Google is developing children-specific versions of its products aimed at the under-12s, smashing one of the tech industry's taboos. TIME UK to Levy 'Google Tax' in Move to Squeeze Tech Giants TIME The 25% tax is aimed squarely at tech companies such as GoogleInc. and Apple Inc. that have mastered the art of shifting their profits away from the ...

Google Has Major Headaches Going into 2015 Because of Apple, Facebook

While Google continues to improve ad targeting, measurements and ad products (local Product Listing Ads, Estimated Total Conversions), there has been no new big ad product launch this year to offset slower search revenue growth (estimated at 8-9% in US)," Post penned in the note. "Also, with Google targeting cloud computing, local retail delivery, video, and the Internet of Things (IoT), we expect elevated capex (up 50% y/y LTM) and hiring (up 22% y/y in 3Q) to drive continued margin pressure,
more than is baked into street estimates."

Must Read: Here's What Google Is Working on Next

He now expects Google to earn $33.81 a share in 2016, well below Wall Street's estimate of $35.77, while expecting the company to generate $73.72 billion in revenue, down from a previous outlook $74.44 billion. Wall Street's revenue consensus is at $73.4 billion.

In the third quarter, Google missed Wall Street estimates badly, as paid clicks rose just 17% year over year and 2% sequentially. On the conference call, Chief Financial Officer Patrick Pichette tried to squash those concerns, that the company's search business was maturing. Mountain View, Calif.-based Google reported earnings of $6.35 a share for the third quarter on $13.17 billion in revenue, excluding traffic acquisition costs. Analysts surveyed by Thomson Reutersexpected the company to earn $6.53 a share on $13.198 billion in revenue.

Shares of Google's Class C stock (GOOG) were lower in early Friday trading, falling 0.95% to $532.20. The Class B shares were down 0.95% as well, trading at $537.40.