After Google shocked Wall Street with a big miss on both revenues and earnings, a top technology investor said it's time to sell shares of the Internet search and advertising leader.
Google reported a 20 percent dive in net income to $2.18 billion. Excluding certain items, the Mountain View, Calif.-based company earned $9.03 a share, vastly underperforming the $10.65 analysts had expected, on average.
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Google also reported net revenue — excluding traffic acquisition costs — of $11.3 billion for the third quarter, below Wall Street's expectations for about $11.9 billion. The tech company has been struggling to turn around a loss-making Motorola Mobility, which it bought for $12.5 billion earlier this year.
(Related: Google's Miss Highlights Big Worry on Wall Street )
Daniel Niles, chief investment officer at AlphaOne Capital Partners, has long been bearish on Google and held a negative position on its stock. After Google's huge earnings miss, Niles told CNBC's "Futures Now " that his firm is adding to the short.
To Niles, Google's problem is that while people are still searching, a growing number of searches happen on smartphones and tablets versus personal computers. On a PC, Google can add multiple display ads into the search results, Niles said. Smartphones and tablets come with a much smaller screen, though, which means Google can't display as many ads. Niles estimates that mobile devices cut down on display ads by up to 50 percent, as compared to a PC.
"More people are buying smartphones and tablets, so this is a big problem for them going forward, " Niles said, adding Facebook and Yahoo face similar issues being as both Internet companies are also largely reliant on advertising. "This switch from PC to smartphones and tablets helps some of the Internet players, like the e-commerce guys like an eBay and it hurts other guys like a Google."
(Watch: Why Google's Big Miss Doesn't Bode Well for Facebook)
