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Google On the Road to $500

It may be too early to pronounce Google's great growth phase as over, but there are few signs that the company is on the verge of another growth spurt.

Search ad revenue is still more than 97% of Google's total sales, and that top line is increasingly connected to the pace of the economy and less so to the expansion into new markets. Google's Android effort has been impressive, with phones at every U.S. carrier, but its impact on revenues has so far been negligible.

Meanwhile, higher costs loom on the horizon as Google pushes a broadband delivery experiment to consumers and businesses.

Google has struggled to demonstrate effectiveness outside its core search ad market.

Google shares are down 13% this year amid a market broadly weaker than what tech investors enjoyed last year. Google was trading down slightly at $534.49 Wednesday.

"Google is increasingly becoming a show me story," Aggarwal writes.

The company needs improvement in areas like graphic ads (or so-called display advertising), mobile ads and YouTube ads, as well as in sales of apps including software to businesses. Those areas are among the keys to any upside in the stock, according to Aggarwal.

Until then, brace for Google $500.

-- Written by Scott Moritz in New York

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