Like Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM) before it, Google (NASDAQ: GOOG) has become two or three companies. Its dominant business of search is no longer much of a growth engine. And, the FTC and antitrust powers in Europe have begun to review that dominance. What its competitors could not do, government officials may.

Google’s revenue still comes from search advertising. The firm’s 10-K puts that number at 96% for 2010, which is barely down from 97% for the previous two years.

The second part of Google is a large laboratory for experimentation. The lab has created some successful products, the most important being the Android operating system. Android has no path to profitability as far as most analysts can tell. Its market share has passed Apple (NASDAQ: AAPL), and Research-In-Motion operating systems and will probably pass perennial market leader Symbian, the dominate OS of Nokia (NYSE: NOK).

Android is a product in search of a profit, but it may eventually have the same trouble as Google search. Its market share may crowd out that of its competitors. At least Google can tell regulators that Android does not have any sales. No one knows if that has been a successful defense against antitrust allegations because it has never happened before.

Among Google’s other experiments are YouTube, the world’s largest video site, which continues its quest to find advertisers and paid video subscriber services. Its competition includes Netflix (NASDAQ: NFLX), the nation’s cable and telecom providers and satellite TV firms.

The real challenges in Google’s experimental portfolio are the widely used map, e-mail, and news businesses. Google has also created an application system to compete with Microsoft Windows. It has had little success and it will require several more years for it to add enough features to be attractive to businesses.

Larry Page becomes Google’s new CEO this week. He has to meld a culture of engineers who work on Google’s powerful search algorithms with the intrepid engineers who spend the search firm’s money with little financial result. Every large tech company has development operations, but few have gone so far afield from the core business of their companies as Google.

Investors have often said that Google’s stock would do better if it were a search “pure play” without all the other experiments the company does tethered to it. A “Google Labs” would need some of Google’s cash hoard to operate. It still may be a good holding for investors, but it would be a risky one which some shareholders would rather exit.

Douglas A. McIntyre

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