Mobile — the innocuous catchphrase often used by the Internet industry to describe making money from smartphones — has become a problem for search giant Google in more ways than one.
After the initial shock of Google's disappointing earnings report, analysts trained their sights on Motorola Mobility, the mobile business it purchased amid much fanfare in August 2011 for $12.5 billion.
Initially expected to help the search giant leverage its Android operating system, Motorola has become a drag on Google's bottom line — its $1.78 billion in revenues fell short of analysts' expectations and weren't enough to overcome a $41 million operating loss.
As the mobile unit's great expectations give way to snowballing losses, the question is being raised in some quarters whether Motorola may yet become an albatross for Google.
"Investors are by and large somewhat disappointed on the loss Google posted on Motorola, [and] there are some questions about really what it will become," Ken Sena, an Evercore Partners analyst told CNBC on Friday.
Much of the heat and light in Google's numbers emanated from a steep 15 percent drop in costs per click (CPC) — an arcane but important way Google earns money from advertisers.
The results sent Google's stock reeling, shaving more than 9 percent off its market capitalization in a single day. On Friday, the stock fell by an additional three percent.
The weakness in its mobile business partly obscured the fact that Google has made strides in using its Android platform to challenge the dominance of Apple's iPhone in the smartphone market.
According to Sena, Google's initial purchase of Motorola was meant to give the search engine a "strategic chip in the discussion with their hardware partners. That if push came to shove somewhere down the road, Google had its own path also."
Now, what once appeared like a shrewd strategic move is looking to some like a vanity purchase, especially given its large price tag.
As a result, "right now for Motorola, I think there's some judgment reserved," Sena said.
At a minimum, Google at least deserves credit for having forewarned markets. On October 4, the company warned of "significant" charges from Motorola, accompanied by planned job cuts and other restructurings at the unit.
The emphasis on Motorola has been magnified in markets, and all but drowned out what most other Google watchers believe are the company's still healthy fundamentals. Even in a soft global economy, Google earns massive profits from its search business and ubiquitous branding.
"I think the core business is fine" even if revenues were slightly disappointing, said Henry Blodget, famed Internet analyst and editor in chief of Business Insider, to CNBC's "Squawk Box."
In fact, the relative cheapness of Android smartphones when compared to the pricey iPhone is helping it to make strides in its fierce digital war against Apple, Blodget argued.
All of which leaves market analysts wondering whether or when the search behemoth can turn fortunes around for Motorola, especially as the company struggles to monetize its mobile business. Analyst Kim Forrest of Fort Pitt Capital told CNBC that Google's fundamental challenge was that "advertisers aren't really willing to pay big bucks for mobile. That's Google's biggest problem." (Read more: Google May Signal Trouble in Mobile: Analyst.)
Similar problems have bedeviled social network Facebook, whose stock has swooned as investors have grown impatient with its mobile strategy. (Read more: Google Has the Same Mobile-Ad Problem as Facebook.)