The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



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(GOOG) - Get Report

stock saw close to a 9% drop after its fourth quarter and full year 2011 results came out.

The primary factor behind the decline seems to be the 8% drop in cost-per-click (CPC) levels over last year. However, given the 34% growth in aggregate paid clicks for the same period, we believe that these metrics are a result of the relatively lower monetization on mobile search which is growing rapidly, hence the divergence in paid clicks and CPC trends.

We continue to remain bullish on Google, which has consistently dominated the search business amongst floundering competitors like






, and believe that the market has over reacted to these earnings.

See our full analysis for Google's stock


While we highlighted the

challenges that lie ahead for Android next year, the company reported impressive 2011 results for its mobile OS. With a total of 250 million Android devices and growing at around 700,000 activations a day, the booming growth on mobile could be a reason why CPC levels declined for 2011. However, we expect that the sheer scale of the Android should continue to keep Google's mobile search division at a 30% contribution towards Google's stock.

Meanwhile, Larry Page also mentioned that Google+ has over 90 million users, a somewhat justified growth considering the marketing blitz Google conducted on TV for its social network. The "fat" claim, however, was that Google+ has a 60% daily engagement rate.

The problem here is the scarcity of any comparable statistic such as page views per user or time spent per day on Google+, and the fact that Google has just generically termed it "engagement" might be an indicator that the company does not want to draw any comparisons with social networking leader Facebook, at least for now.

We are revising our estimates for Google based on our change in forecasts for revenues and EBITDA margins for Google's mobile and PC search divisions as well as changes to the company's net debt/cash position.



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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.