Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) third-quarter earnings report last week missed earnings estimates, sending shares down 2.5% the following trading day. Even after a small rebound in the stock recently, the decline now puts Google stock down almost 7% year-to-date as investors evaluate whether or not the search giant's growth opportunities for its bottom line are permanently slowing. And the report has brought into focus a worry that is increasingly becoming more of a real question than a curious side note: Is Facebook (NASDAQ:FB) actually already stealing meaningful market share from Google?

Google

Why shares are lower after earnings
Google's non-GAAP earnings per share for the third quarter missed estimates, coming in at $6.35 versus estimates for $6.53. But investors shouldn't fret too much about the miss. One of the main reasons for the lower-than-expected earnings was what Google's CFO Patrick Pichette called a "banner year" of college recruiting of recent graduates. The company added 3,000 employees to its payroll, bringing the total tally of Google employees to 55,030.

Google's reported revenue of $16.52 billion, up 20% from the year-ago quarter, was just short of analyst estimates for $16.58 billion. Year-over-year non-GAAP earnings growth of 12.7% lagged behind revenue growth -- a normal trend for the company as it transitions to a more competitive mobile operating environment.

The one key metric that may have sparked the market sell off of Google stock could have been the decline in growth rates for the company's closely watched paid clicks metric. Google defines paid clicks as the clicks on ads on both Google sites and its network sites. Paid click growth was up 17% from the year-ago quarter, which was a meaningful slow down from the 25% year-over-year growth reported in Q2. In fact, that's the third sequential slow down in growth rates in a row from the 31% year-over-year growth in paid clicks reported in the fourth quarter of 2013.

But Pichette suggested during the call that investors shouldn't worry about the decline in paid clicks. Insisting that the metric should be viewed as a "basket" along with its cost-per-click, which saw less deceleration in its growth rate than in the quarter prior, he emphasized that the fluctuations in this basket on a quarter-to-quarter basis are normal. They are the reflection of experimentation and other factors, he explained.

But here's the big picture that is concerning investors
"Rivals Slow Google's Money Machine," read a WSJ headline this weekend on Google's earnings report. The article takes a look at the key concern among Google investors: Is Facebook's success in mobile becoming a threat to Google?

Not only is Facebook's fast-growing demand for ads on its own site reflecting its increasing popularity among advertisers, but the social network has also recently taken its highly targeted ads outside of Facebook. This move puts Facebook in direct competition with Google display ads on its network sites, and also beefs up Facebook's value proposition as an alternative to Google's core search business.

"The growth of Google's search-advertising business, the money machine that made the company one of the world's most valuable, may be slowing as alternatives like Facebook Inc. grab more marketing dollars," wrote the WSJ's Alistair Barr and Rolfe Winkler.

Google Tmf

Some advertisers, Barr and Winkler say, are shifting their ad budgets from ads on Google to ads on Facebook -- especially in mobile, where Facebook is executing very effectively. Barr and Winlkler imply that this trend is at least partly reflected in the deceleration in revenue in Google's core search business. To further back their thoughts they cite Bernstein Research analyst Carlos Kirjner's estimate for Google's search-advertising year-over-year revenue growth of 17%, which is down from his estimate of 21% growth Q2. And they cite Stifel Nicolaus analyst Scott Devitt, who told clients last week that Google's revenue growth is increasingly depending on non-search businesses, like YouTube.

The biggest problem with this shift in ad revenue toward non-search businesses is that it has a negative impact on earnings growth since its search business is more lucrative than most of its other businesses.

But does this trend really have anything to do with Facebook eating into Google's growth opportunity? Probably, but as Barr and Winkler are sure to note, the impact is small at this point. Google still dwarfs Facebook in size. For instance, Google's Q2 revenue was $16 billion while Facebook's was only $2.91 billion. This makes any of Facebook's gains a small threat to Google.

Nevertheless, Facebook's smaller revenue is likely a legitimate, albeit small, threat to Google. In Barr and Winkler's most convincing evidence to this trend, they cite data from online-marketing agency 3Q Digital's four largest clients that advertising on Google and Facebook.

[These clients] spent just over $12 million on Google AdWords in the first nine months of 2014, up nearly 20% from just over $10 million in the same period last year. The agency's Facebook spending for those clients grew more than sevenfold, but totaled only $1.7 million for the same nine months of this year.

Google Android

Google exploded onto the mobile scene with Android. While the move definitely helped the search giant solidify a spot for its products and services in mobile, the highly competitive environment creates a lot of uncertainty. Image source: Google.

So, it is increasingly likely that Facebook really is stealing market opportunity from Google in mobile -- but the impact on Google is likely to be small.

Verdict on Google stock amid Facebook's rise: buy, sell, or hold?
Overall, Google investors should continue to hold shares, even as Facebook bolsters its platform. Yes, Google's revenue is still growing, and earnings should continue to grow -- though likely at slower rates. But Google's scale and experience in its core search business gives it a huge advantage that should enable the search giant to make lucrative profits in online search for years to come. On the other hand, with the mobile environment looking more competitive, investors may want to hope for a larger sell-off before they buy shares.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (A shares), and Google (C shares). The Motley Fool owns shares of Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.