I’ve been enamored with Google for many years. I can’t think of another company whose products I use and love more than Google’s. Search, maps, e-mail, Chrome, contacts, calendar, YouTube, docs, drive, and Picasa have improved my life in many ways.

I started studying Google as a potential investment candidate a few months ago and even initiated a small position to force my thinking. Living in India, I’ve seen how much people rely on Google’s services and how it’s opened up possibilities, particularly for the poor. While riding around in rickshaws and cabs, I’ve observed how drivers use cheap Android powered phones to run their businesses, communicate with loved ones (primarily through What’s App), consume news, and help their children get access to the world’s information. Google’s mission and impact is tangible.

I’ve been battling confirmation bias because I believe Google is one of the world’s greatest social enterprises and am cheering for it to succeed. I’ve relied upon my checklist to avoid falling into dangerous psychological traps and have tried to spend most of time examining the bear thesis. I haven’t been able to mitigate a few of the large key risks facing Google and hence am unable to establish a large position at this juncture. My opinion might change in the future should new facts surface. I’ve outlined some of my higher level concerns below.

Search Could Be Disrupted: It’s well known that Google generates the majority of its revenue from search advertising (estimated 85%). With regards to desktop search, it is believed to have 85%-90% share of the market. However, internet consumption is gravitating more and more to mobile, where Google is facing pressure on two fronts. First, cost per click rates are less on mobile web than desktop because conversion rates are lower. Second, a large portion of what consumers do on their phones are through native apps rather than the mobile web where Google is the primary gateway.

In addition, Google is facing competition from Amazon, Facebook, Twitter, Instagram, Snapchat, Pinterest, LinkedIn, Yelp, TripAdvisor, Apple’s new spotlight search on OS X Yosemite (powered by Bing), and dozens of start-ups which are vying for a piece of the digital advertising pie. These products have powerful embedded search functions which could reduce consumers’ demand for Google’s search services. When we want to search for product reviews and pricing, we might go directly to Amazon, especially if we’re Prime members. When we want to discover the best local restaurant, we might go to Facebook or Yelp. When we’re looking for information on people, we might use any one of the social media sites. When we are searching for home décor, fashion/apparel items, or crafts, we might go directly to Pinterest. When we are searching for hotels, we might default to TripAdvisor. In the future, search could be disaggregated among a variety of niche applications.

It’s very difficult to predict with accuracy how new products will change consumer behavior. I am encouraged by Android adoption (which gives Google control over the user experience and eliminates traffic acquisition costs) and Google’s growth in mobile advertising, but Android is not without its own issues (see below).

Limited Access to Chinese Market: Google pulled out of the Chinese market in 2010 due to a cyber attack, suspected by Google to be led by the Chinese government, on Gmail accounts of human rights activists. In addition, although Android dominates the smartphone market in China, most phones don’t come preloaded with Google’s services. Google’s limited access to one of the most lucrative and fastest growing markets in the world cuts off a serious revenue engine for the company. The silver lining is that AdMob has a presence in China which should provide a small, but growing business for the company in one of the world’s largest markets.

EU Antitrust Case: The new EU commissioner, Gunter Oettinger, has re-opened the antitrust case against Google, which was heading towards settlement earlier this year. This effort has been heavily spearheaded by German publishing firm, Axel Springer, which claims that Google gives preference to its own properties (YouTube, local) in search results. Many German politicians are in the pockets of the media companies and are lobbying for Google to either be broken up or dramatically change the way it runs its search algorithms. The anti-Google sentiment has spread from Germany to other parts of Europe. This is a very serious antitrust case and stems from a deeper animosity European companies have towards American technology companies. Many Europeans believe that American tech companies have made European companies uncompetitive and destroyed their economies. The former EU commissioner went on record saying that the outcome for Google is going to be worse than Microsoft. Microsoft fought a decade long battle against regulators and was forced to pay $2 billion in fines. Google may have to pay multiples of that amount.

Financial penalties aside, there are deeper, structural implications for what’s happening in the EU. It’s bringing more awareness to Google’s market power and could lead to further regulatory scrutiny for the company in other regions.

Potential Adverse Changes to European Tax Policies: Google generates one third of its revenue from European operations. Ireland recently announced that it will abolish its controversial “double Irish” tax scheme which has enabled multinationals such as Google, Apple, and Facebook to dramatically reduce their tax burden. The loophole allows companies to send royalty payments for intellectual property from one subsidiary registered in Ireland to another, which resides for tax purposes in a country with no corporate income taxes.

It’s unclear what the impact would be, but reports and analysis by major publications peg it in the low single digit billions range, a significant number.

Concerns Over Privacy/Potential Reputational Harm: Google owns perhaps more data than any non-intelligence organization in the world. In light of Wikileaks’ revelation of NSA spying programs over the past few years, the public has become increasingly worried about personal data and privacy. Although Google takes extreme measures to protect user data, it can’t escape from the fact that it uses a lot of data to sell advertising programs to advertisers. A simple review of news commentary, Twitter chatter, and Google’s public relations efforts suggests that Google’s image in the mind of consumers is becoming increasingly negative.

The greatest risk Google faces is an uncontrollable, unanticipated event where private user data is breached. With 60,000 employees and thousands of data centers, Google has the nearly impossible task of protecting its data from multiple points of access. It will take only one negative event to destroy Google’s reputation and cause a mass exodus of users from its services.

Net Neutrality: Netflix set an unfavorable precedent earlier this year by agreeing to pay sums of money to Comcast and Verizon for better connection rates for consumers. Although this didn’t violate net neutrality rules, it lays the foundation for last mile providers to charge fees to high bandwidth producers. Furthermore, the issue of net neutrality is one which is constantly debated. Should the FCC change its stance in the future, Google may be required to pay hefty sums to push its traffic into consumers’ homes.

Google is trying to upend the cable cartel through its Google Fiber project, which is off to a great start. This is a potentially disruptive business which could produce many beneficial outcomes for the company.

Android‘s Future is Uncertain: Despite the headline numbers (80% market share, 1 billion devices), it’s still too early to declare Android the winner in mobile.

The first issue is industry profitability share among device manufacturers. Currently, Apple is capturing nearly 70% of all the profits generated by handset device sales. The remainder is going to Samsung. This is not a healthy outcome for Android. If HTC, Sony, LG, Motorola, Lenovo, Asus, and other Chinese handset manufacturers can’t make a sustainable profit, they will exit the phone business. This would leave Samsung as the only legitimate partner for Google and shift all the power in Samsung’s favor. Samsung has been developing another open source operating system (Tizen) which it could use as an alternative. The main issue is that Apple is dominating the premium phone segment, where the most profitable customers are, and has achieved lock-in with its customers (90%+ repeat customers) by way of its cloud services, iTunes, and high customer satisfaction ratings. The Chinese upstarts, including Oppo, Oneplus and Meizu, selling high spec phones at bottom basement prices are cannibalizing Samsung, not Apple. If the entire Android handset ecosystem devolves into a profitless endeavor, Google will be left without hardware vendors to partner with. Google is trying to change this with its new set of Nexus products, which are being marketed as differentiated, premium products at premium price points.

The second issue is handset fragmentation. The open source initiative has its positives and negatives. Similar to the issue Linux has faced over the years, there are numerous versions of Android running on thousands of different devices around the world. This makes development more difficult and expensive for developers because they have to design software for various software and hardware architectures, and different screen sizes. This contrasts greatly with Apple’s iOS platform, where there are a limited number of devices and most users are on the same OS (93% of iOS users were on iOS 7 soon after it was released, as opposed to only 25% of users on the latest version of Android KitKat 4.4). If you listen to what developers are saying, it’s evident that start-ups and growth stage companies are developing for iOS first, and much later for Android (many quality apps like Tweetbot are iOS only). Apple is benefiting (by design) from a number of factors: (i) its users are more affluent and have a higher propensity to buy paid apps and/or make in app purchases, (ii) software development is cheaper and easier on iOS, (iii) most people in the technology industry, particularly developers, are heavy users of Apple products, and (iv) iOS users engage significantly more with their devices, both with apps and mobile web. We’re at a point where this could create a virtuous cycle for Apple whereby the best apps are iOS only → people purchase iOS devices → customers are locked in as they put their information in Apple’s cloud and store all their purchases in iTunes → developers develop more for iOS → people purchase more iOS devices.

Android certainly has a lot of momentum and with a billion devices, there’s a lot to keep developers interested, but these markets can tip very quickly, especially if Apple makes the decision to go down market and further open up its ecosystem. Android is critical to Google’s future; if it doesn’t have control over the device, its services could be locked out by device manufacturers. Google is well aware of the issue and is trying to streamline the experience with its Nexus and One strategies. It’s to be seen how much traction this gains in the market.

Google X is a Wild Card: The bulls are almost unanimously excited about Google because they believe (i) Google’s existing services are under monetized, and (ii) Google X is available as a free option on a number of potential multiple billion dollar businesses. Both points are valid, but point (ii) is difficult to bank on. Microsoft has bankrolled its own powerful research group, Microsoft Research, for many years and has yet to see one multiple billion dollar business come out of it. These projects are called moonshots for a reason – they’re extremely low likelihood, high impact projects. I don’t believe it’s a defining variable to base a large investment on, particularly given some of the key risks facing Google’s core business.

It’s Still a Technology Business: Google is in the technology business. Disruption is becoming increasingly common in all industries, but the information technology industry in particular is at risk due to the sheer number of innovators in the ecosystem. Furthermore, Google seems to be in the cross hairs of a number of powerful companies and governments: Facebook, Pinterest, and Twitter in social; Microsoft and Apple in mobile OS and cloud services; Amazon in e-commerce and cloud services; and governments around the world. It’s the only big technology company being universally attacked.

The history of the technology industry suggests that large companies, even innovative ones, can’t maintain their edge and are eventually overtaken by upstarts. We’ve seen this many times: IBM (by Microsoft), Microsoft (by Apple/Google), Intel (by ARM), Myspace (by Facebook), and even Google (by social media) and Facebook (by Pinterest, Twitter, and Snapchat). Consumer preferences and the way consumers consume digital content changes rapidly. It’s unclear whether Google will be in a position to catch the next wave.