In spite of Google's annual revenue growth of 52%, many Wall Street analysts are now advising their clients to hold off on buying Google stock. Has Microsoft's bid for Yahoo made that much of a dent, or are there other factors at play?

"We think that the first cracks may be starting to appear in Google's hyper-growth story," Jeff Lindsay, a financial analyst at Sanford Bernstein, reportedly wrote in a note to clients at the end of last week.

Since the release of Google's fourth quarter financial results last week, its stock value has continued to slide on the NASDAQ exchange, and was continuing to do so this morning.

That continued slide is an indication of growing concerns among investors about Google's advertising performance, especially its click-through rates and its difficulties in harnessing revenues from social networking sites...as well as the simultaneous threat now being posed by Microsoft's proposed acquisition of Yahoo.

Citing an increased risk profile for Google, Youssef Squali, an analyst at Jefferies, recommended that investors "step to the sidelines," downgrading Google from a buy to a hold and reducing his price target for Google from $725 to $600.

Robert Peck, an analyst at Bear Stearns, wrote to his clients that a Microsoft + Yahoo combo would produce a major contender to Google in terms of overall Internet page views.

Peck also observed that both Microsoft and Yahoo hold an edge over Google in display advertising, "which currently does little business in display."

Google has been planning to couple its contextual ad colossus with DoubleClick's giant display ad platform, but that merger deal still awaits approval from European antitrust regulators...that is, if it comes at all. "The display business is literally right in front of us and the DoubleClick acquisition is an essential part of that strategy, so we'll see," said Google CEO Eric E. Schmidt in an earnings call with financial analysts last week. "But of course, we have a sales force that is perfectly capable of selling [display ads], customers are purchasing those already, and it's a market that would benefit from the kind of technology that Google can bring to market."

During that call, it was a slowdown in Google's paid-click ad volume -- or the clickthrough rates on ads -- that seemed to bother analysts more than anything else. "Our worry going into the fourth quarter about Google was related to monetization levels, or cost-per-click growth, given what was going on in financial services, retail, and travel. We weren't worried about query growth," said Imran Khan, an analyst at J.P. Morgan, raising the first question on the call.

"Now you've reported your numbers and by our math, the cost-per-click growth was about 16%, so very robust, the highest we've seen in a long time, but by your math, the paid click growth was only about 9% sequentially in what is typically a seasonally strong quarter," according to Khan.

Among other factors related to lackluster growth in paid-click ads, Google officials pointed to difficulties in taking advantage of ads on social networking sites, suggesting in particular that a deal between Google and MySpace isn't paying off yet.

Google has been taking an "experimental" approach to advertising on sites such as MySpace and YouTube, according to the Google executives.

"So all in all, we are doing a lot of experimentation. We are starting to do it globally and we are doing it in every integrated fashion and by adding the other key assets that we have," said Omid Kordestani, Google's senior vice president for global sales and development, also during the call.

"Remember that the Google model is one of experimentation. We keep trying and we keep trying new ideas until we find the ones that really generate phenomenal ROI and not only do we go with them but they grow very quickly," Schmidt said.