Analysis: Google's Page and Wall Street: Who needs who?

The 38-year-old tech visionary -- who with Sergey Brin created the algorithm that today powers the world's most-used search engine -- risks alienating a powerful investor constituency that will be crucial to his efforts to ensure Google remains at the top of its game, say some industry observers.

Investors had hoped to hear Page sketch out his vision during a Thursday post-earnings conference call. Instead, Page came on the line for a few minutes, expressed his optimism in the company, then signed off without entertaining questions on a stunning 54 percent cost spike.

Wall Street promptly responded by selling the stock down more than 8 percent on Friday, wiping out $15 billion in value -- devaluing Page's own holdings in the company -- and setting a record for the biggest single-day decline since December 2008.

Of course, there are plenty of CEOs who do not pander to Wall Street, including Apple Inc's Steve Jobs. But RCM Capital Management portfolio manager Walt Price said even the Silicon Valley icon tackles shareholder concerns head on.

"He hits them head on and he hits them on a competitive basis. He talks about why he's superior to Android and other tablets," Price said. "That's probably a better model than saying I'm enthusiastic about the outlook and departing."

"Maybe (Google) doesn't want to talk about it, but their multiple is going to go down until they do," Price said. "Larry Page's vision would be a good place to start, and I think people are worried that Facebook is a giant sucking sound on the valuation of Google and the future of Google."

The cold shoulder to investors seems in character for Page, who is famously averse to media appearances and has a long-professed commitment to long-term goals rather than to the short-term results Wall Street is known to crave.

The fact that Google generates billions of dollars in cash gives Page a fair degree of independence, since he does not need to raise money on Wall Street, said Daniel Niles, senior portfolio manager of Alpha One Capital Partners, a hedge fund that has a position in Google shares.

Still, as Page seeks to revamp Google and fend off growing threats from Facebook and Apple, critics say he will need to get along better with Wall Street.

In a rare downgrade of Google's stock, Citi analyst Mark Mahaney cited the "token appearance" by Page as being among the negative points from the company's quarter.

"We would have wanted Larry to stick around for Q&A," Mahaney wrote in a note to investors on Friday.

Ignoring Wall Street exacted an immediate toll on Google's share price, which represents an increasingly important weapon for Google.

"In some sense the stock price determines the morale of the employees. So you do need to care of the stock price or you're going to lose your employees," Price said.

With Google having lost a string of key executives and engineers to Facebook, Twitter and other rivals, retaining talent is a key priority -- particularly for a company whose main currency is its people.

Last year, the company announced it would give a 10 percent pay raise to all its employees, hoping to staunch a flow of prime talent to Facebook, which had the edge in terms of an upcoming IPO that might just turn its top employees into multi-millionaires.

Of course, the fact that Google is being led by a CEO eager to invest in long-term projects represents a benefit that can serve as its own lure for many engineers.

Shareholders have long griped about Google's relationship with investors. The company offers no financial guidance and does not break out results for of its various business units, including mobile and display advertising. In recent years, Google even stopped briefing analysts in person at its Mountain View, California, headquarters.

But some say Google's need to boost its Silicon Valley credibility need not come at the expense of Wall Street bragging rights.

"Longer term it doesn't build any kind of support from the analysts. It's an asset. Your reputation is always an asset. And when you do stuff like this you damage the reputation. You're wasting an asset in a sense," said James Post, a professor at Boston University School of Management.

"If you insult the party asking the questions, all you do is piss them off for the long term and then they're not going to cut Google any slack six months from now, or a year from now."

(Editing by Ken Li, Bernard Orr and Maureen Bavdek)