The narrative around Google Inc (NASDAQ:GOOG) has become monolithic. In the minds of investors Google now seems all encompassing. The company controls the internet world, competition from Facebook Inc (NASDAQ:FB) and others isn’t worth thinking about, and the smart phone world will soon belong to Mountain View. This rosy picture of Google may be a little overblown.

Google is far from a perfect company. There are a wide range of flaws and weaknesses in the company’s business. Very few people are imaging that the company’s business is going to collapse any time soon, but Google growth may level off sooner than investors appear to think. Google has negative risks, and they could compress the firm’s share price in the year ahead.

Google Business Model

“Very little downside risk” is a phrase associated with Google Inc (NASDAQ:GOOG). It is not a healthy association. Google is the biggest player in the internet space. It controls online advertising. It is involved in tens of different markets, though almost all of its money comes from a single business, advertising.

The Google Inc (NASDAQ:GOOG) business plan is reasonably simple at its heart. Step one is to increase the amount of time people spend on the internet, and by extension the amount of advertisements they see and the amount of information they give Google. Step two is to leverage that information to improve the efficacy of those advertisements.

Google works at this business model and uses many indirect methods to convince people to use the internet more. The company has attempted to push down the price of tablets and smart phones in order to get them into more people’s hands. It has also attempted to push faster internet connection across the United States in order to increase advertising revenue.

Management at Google is great at its job, and the company’s business model is strong as is its moat. The forces that could level off share price could still come from inside the company, or thy might come from the outside.

Google Downside Risk

There are three major risk categories for Google Inc (NASDAQ:GOOG) that investors should take account of.

The first is regulatory and state pressure. Google is the most important company in the internet ecosystem. Regulators have approached the company about its position of power before, and Mountain View has come out unscathed.

As the internet market matures and regulators begin to see how powerful Google is, regulatory pressures may mount and cause a real hampering of Google business. This could happen next year, or in the next decade, but Google is likely to be hit by regulatory pressure at some point in the medium term.

Google may also suffer from over-investment. The company spends a large amount of money on projects that may never pay off. This risky attitude to cash does not deliver the returns investors should look for from investment, and is subsidized by the ad business. The company’s margins have suffered as a result, and this trend might eventually take a bite out of EPS.

Google’s size is an issue. This is a problem that regulators could solve for investors. Google is getting very big, and very unwieldy. That makes it difficult to manage. Businesses have never been as big as they are today, and Google is one of the biggest in the world. When it comes down to it, we don’t know all that much about the management structure of Google. We do know that company’s tend to get out of control when they push the envelope.

Google Inc (NASDAQ:GOOG) faces risks in the medium term. Just because investors are ignoring them doesn’t mean they’re not there.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.