NEW YORK (TheStreet) –– Google(GOOGL) - Get Report had a difficult 2014, falling nearly 6%, broadly underperforming the tech-heavy Nasdaq, but as the calendar turns, investors may be missing Google's next big opportunity in plain sight -- Google Play.

Credit Suisse analyst Stephen Ju says Google Play provides an interesting opportunity for revenue upside, as it's growing faster than many investors expected.

"Google Play has risen from almost zero two years ago to a revenue run rate equal in size to YouTube (at about $4 billion in 2014), which still receives the disproportionate amount of attention from Google investors," Ju wrote in a note. Despite growing at a much faster rate than the majority of Google's other businesses, especially YouTube, Google Play doesn't get the respect it deserves.

Ju noted that Play, Google's (GOOG) - Get Report competitor to Apple's (AAPL) - Get Report App Store, finished 2014 having grown roughly 70%. This year growth will slow to a still-gaudy 42%, he says.

And Apple isn't doing badly in this business either. The company led by CEO Tim Cook recently announced that the App Store had an extraordinarily strong 2014 -- billings rose 50% and apps generated $10 billion in revenue for developers. With Apple taking a 30% cut of sales, that means Apple generated around $4.3 billion in revenue from app and in-app revenue. Billings for the App Store in the first week of January also set a new record, with customers spending nearly $500 million. 

Perhaps the best part of Google Play is the business model, which is almost entirely free money for Google, at very high margins.

Shares of Google's Class C shares (which carry no votes and are represented with ticker GOOG) were lower in early Wednesday trading, falling 1.1% to $490.67, near a 52-week low. The Class A shares (which have one vote apiece and are represented with ticker GOOGL) were off 0.89% to $497.35.

Like Apple, Google takes a 30% of app sales, and the developers take the other 70%. Of that 30%, there are limited costs -- the credit card feeds paid and the revenue that is shared with Google's telecom partners. Outside of that, it all pretty much goes straight to free cash flow, and with the business growing at high double-digits, investors should expect to see more free cash flow in the future.

A look at some of the booking data from some of the companies in Google Play affirms the strong growth, even if it's not entirely comprehensive. "Looking at the time series reconfirms our contention for continued upward bias to estimates from this
segment:"

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Ju believes that on a constant currency basis, Google Play revenue grew 129% over 2013, peaking in the third-quarter with an approximately 150% growth rate. The current forecast calls for 75% constant currency growth in the fourth quarter. Google is slated to report 2014 fourth-quarter results later this month, where analysts surveyed by Thomson Reuters expect the company to earn $7.05 a share on $16.8 billion revenue, including traffic acquisition costs.

Google gets its fair share of criticism for spending large amounts of money on businesses that are often seen as pipe dreams (Project Loon) or exceptionally long-term bets, such as contact lenses, but the money spent on developing Google Play appears to be paying off and then some.

--Written by Chris Ciaccia in New York

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