Google's Lag Lingers

Predicting the five-year growth rates often used in calculations can be especially tricky for a company in a fast-changing business.

Doubts about whether the search ad business -- which makes up almost all of Google's revenue, putting $10 billion in its coffers in 2006 alone -- can keep growing at a blistering pace may also be giving investors pause, Sanderson believes. But that's because they may not fully understand the international opportunity the search giant is looking at.

"The intuitive bias that the law of large numbers is catching up does not appear to be the case in most of Google's end markets," Sanderson wrote. The U.S. and U.K. made up 72% of Google's revenue in 2006. But other developed-country markets where Google is dominant (with more than 70% of market share) have a total GDP 11% larger than the U.S. and U.K. duo -- and 35% more broadband subscribers.

"Clearly, growth in international markets can keep extraordinary growth going for Google," wrote Sanderson, who has a $600 price target on the company. "We believe it is only time that stands in the way of capturing this opportunity."

Sanderson is probably right that Google's search opportunity is being overlooked. But time can also be a pretty annoying obstacle, as Google shareholders must be realizing by the day.