Part of the problem is that investors are skeptical about what Android means to Google's financial future. Google has seen a slowdown in the growth of its core search business. It doesn't have much to show for its stream of M&A deals, nor from products like Google Maps, Gmail or Google Apps. Its expansion into China has stalled due to trouble with the government in Beijing and the strength of local search engine Baidu (BIDU). Its annual revenue run rate is $34 billion, compared to $29 billion for the 2010 calendar year. And while Microsoft's (MSFT) search alliance with Yahoo (YHOO) is still a distant second in terms of U.S. market share, the world's largest software company seems bound and determined to pick up some portion of Google's customer base.
Many investors are also concerned about Google founder Sergey Brin replacing Eric Schmidt as CEO. There's a great deal of uncertainty about whether either man holds the key to unlocking Google's next big revenue-creating opportunity.
What is certain is that, despite its extraordinary adoption rate, Android hasn't impressed Wall Street.