Google expands AI Search ads globally as core ad growth slows

Google is expanding ads in its AI-powered Search experiences to international markets, as the company seeks new advertising revenue while growth in core Search advertising slows. The move was announced Wednesday during Alphabet's third-quarter earnings call, where Alphabet reported $127.6 billion in revenue, up 25% year over year. Alphabet shares fell 8% following the results.

AI Search ads go global

Philipp Schindler, Google's chief business officer, said the company is scaling high-quality ads within AI Overviews and AI Mode to more users and queries. This includes taking its monetization footprint global for the first time, with ads in AI Mode expanding into international markets alongside multi-turn ads and AI Mode in the U.S. Google says click-through rates for sponsored product listings in AI Mode are already comparable to those for organic listings, and user research indicates people find the ads relevant.

Search growth slows

Google Search revenue grew 12% year over year in the third quarter, down from 17% growth in the second quarter and 19% in the first quarter. The slowdown puts added pressure on Google to turn its expanding AI features into a meaningful source of advertising revenue.

AI changes how people search

Sundar Pichai, Google's CEO, said Search queries grew at their fastest year-over-year rate in five years, though he did not disclose the exact growth rate. He credited AI features with changing how people use Search, including prompting longer and more complex queries. Queries in AI Mode are three times longer on average than traditional searches, while one in five AI Mode searches globally involves voice, images, or documents. Google has also surpassed 50 billion visual searches per month.

Quarter results and products

Alphabet's Google Services division, which includes Search, generated $96.3 billion in revenue, up 11% year over year. Google Cloud revenue surged 103% to $30.7 billion. The results follow a busy quarter for Google, including the release of Gemini 4 Argon, the growth of the Gemini app to 1 billion monthly users, and the launch of its Pixel 11 lineup.

Sources: TechCrunch