Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), or Google Inc (GOOG)? Competition Is Heating Up

In contrast to Apple, I recently wrote that substantial evidence indicates Google Inc (NASDAQ:GOOG)’s mainstay product, desktop search, appears to have reached its growth peak. The company is now focused on translating its success on the desktop into mobile, with the jury still awaiting a final verdict.

Here are four reasons Google is a relative sell after recent earnings:

The company missed revenue expectations when it reported Q1 2013 results on April 18. Although revenue grew 31% year-over-year, an independent third party which manages $1 billion in advertising for Google clients recently reported a 1% decline after 8 consecutive quarters of 18% increases on average.

Earnings were bolstered by an irregular 8% tax rate during the January – March period. This compares with an 18% tax rate for the fourth quarter 2012 and a 19.25% rate on average for the last four quarters.

Cost per click, or the amount of revenue Google receives when you click on a paid advertisement, decreased 4% during Q1 2013. The recent quarterly decline comes following weaker ad prices throughout fiscal 2012.

Revenue from Google’s Motorola Mobility unit fell to $1.02 billion, compared to $1.51 billion during fourth quarter 2012. Originally heralded as a win-win for shareholders, Google has suffered more than $1.25 billion in losses since the Motorola acquisition in May 2012.

Google Inc (NASDAQ:GOOG) is hoping to stem a continued drop in mobile ad prices by forcing new advertisers to participate in both mobile and desktop platforms beginning in the second half of 2013. However, corporate advertisers have indicated that their ROI on the mobile platform can oftentimes be significantly less than the desktop counterpart, thereby stemming their willingness to pay up to Google’s demands.

The stock appears richly valued at 24x earnings, a high multiple for a company which has yet to demonstrate success with a moving needle.

Amazon: Closing in on the race