San Francisco: Its feud with the Chinese government may be the least of Google Inc.’s worries as the online search leader contends with slowing growth, regulatory scrutiny and a shift in ad spending.

While California-based Google has the biggest share of online search at home and in western Europe it has been leapfrogged by social network Facebook Inc. as the most popular US website. Google’s ventures in mobile, video and display ads have failed to match the success of search, and regulators may thwart efforts to expand through acquisitions.

As sales gains diminish, some investors are concerned that Google has begun to resemble Microsoft Corp., which generates billions of dollars in cash from its mature flagship business but has struggled to conquer new markets. Google’s sales increased 9% last year after doubling in 2005.

Nosedived: Google’s headquarters in Mountain View, California. Google shares, which doubled last year, have dropped 8.6% in 2010, the sixth biggest decline among the 75 technology stocks in the S&P 500 Index. Ryan Anson/Bloomberg

Last week, after a two-month dispute with China over censorship issues, Google shut its mainland Chinese search engine and redirected users to its Hong Kong site. Google was second in the Chinese search market, behind Baidu Inc.

Google shares, which doubled last year, have dropped 8.6% in 2010, the sixth biggest decline among the 75 technology stocks in the Standard & Poor’s 500 Index. The stock is 24% below its peak of more than $740 in 2007.

Google spokeswoman Jane Penner declined to comment.

One of Google’s biggest challenges comes from Palo Alto, California-based Facebook. This month, Facebook surpassed Google as the most visited website in the US, accounting for more weekly visits than, according to the research group Hitwise.

Facebook’s gains at Google’s expense weren’t lost on Levi Strauss and Co. The closely held maker of blue jeans and Dockers pants is advertising on Facebook this year for the first time, while its budget for search, Google’s mainstay, is staying about the same as last year, said Megan O’Connor, director of digital marketing.

Earlier this month, the San Francisco-based company sponsored events at the South by Southwest music festival in Austin, Texas.

Levi advertised across Facebook for two weeks leading up to the event, targeting 18 to 34-year-olds who identified themselves as music fans, O’Connor said. “We are looking at social as a new place for us to spend."

The same goes for advertisers such as Starbucks Corp. and JetBlue Airways Corp.

“We provide a platform for marketeers to create an authentic, two-way connection with their customers that has not been possible at scale before," Facebook spokesman Brandon McCormick said.

To catch up in social media, Google added a social-networking feature called Buzz to its Gmail email, letting users share photos, comments and clips from its YouTube site. The site drew criticism over privacy, prompting Google to scale back some of Buzz’s features.

Google, with almost $25 billion in cash and marketable securities, also bought Aardvark, a site that lets users pose questions and receive answers online. And its Orkut social network has gained wide followings in India and Brazil.

Even with rising competition, Google will benefit as advertisers shift spending to the Internet, where consumers are spending more time, said Jeff Donlon, an analyst at Manning and Napier Advisors Inc.

Google will keep making improvements to search and display, allowing advertisers to get a higher return on their investment, said Donlon, whose firm manages more than $25 billion and owns about one million Google shares.

Google has also made headway in efforts to expand into mobile and display advertising, where rival Yahoo! Inc. took an early lead. In mobile, Google is taking on Apple Inc.’s iPhone with its Android operating system. Some 6.8 million Android-powered phones were sold in 2009, accounting for 3.9% of the global market, according to researcher Gartner Inc.

Most analysts remain bullish on Google. Of analysts surveyed by Bloomberg, 32 have buy ratings, eight rate it a hold, and none recommends that investors sell the stock. By contrast, 15 analysts rate Yahoo a buy, 21 have it as a hold, and one has a sell.

To bolster mobile advertising, Google announced plans in November to buy AdMob Inc. for $750 million. The US mobile-ad market may more than triple to as much as $3 billion by 2013, according to a Sanford C. Bernstein and Co. report last year.

“They need to show how they’re going to monetize things like Android, where they seem to be taking good mobile market share," said Richard Parower, manager of the $533 million Seligman Global Technology Fund at J.W. Seligman & Co. in New York, which holds Google stock. “How can they turn that into operating profits?"

Google spent $4.9 billion on YouTube and DoubleClick in 2008 to increase sales of ads in videos and help customers create and measure Web advertising campaigns.