Google's Wild Ride Is Over

By December 2006, the trading range had shrunk to $41, or 8% of the stock's value at the end of the previous month. And December was no fluke: Google has simply and steadily grown less and less volatile.

What's behind the slowdown? For one, Google's core search business, while still healthy (and better than Yahoo!'s ), is maturing. Google's top-line growth rate was 73% in 2006 -- impressive yet down from the previous three year's growth rates of 92%, 118% and 234%, respectively. Slower growth rates make it easier to pinpoint estimates.

Second, investors have gotten creative about gauging Google's financials even without guidance from the company. They're turning to customers, search firms and search-optimizations companies whose livelihoods depend on understanding Google's business down to a science. Even the niche community of blogs preoccupied with the company garner increased investor attention.

Third, although no one really wants to come out and say it, Google's press conferences have gotten boring. That's not meant as criticism: I'm sure it's exactly what management wants. Not long ago, a slip of the lip or a moment of clever spontaneity taken out of context became top news, underscoring the cliché of the moment: genius Google, global-domination Google, evil Google, etc.

So, the fact that the business press seemed more drawn to Boeing's earnings report is probably A-OK with Google. And a more stable stock for Google is probably a good thing for investors in the long run, if less entertaining.

But there's a catch: Investor indifference means there are fewer people paying attention. And getting people's attention is what the Internet advertising business is all about. When people stop talking about your Internet service, it's time to start worrying. Just ask MSN.