Google expands AI Search ads globally as core ad growth slows

Google is expanding advertising in its AI-powered Search experiences to international markets, including ads in AI Mode and multi-turn ads in the United States. The expansion, announced during Alphabet’s third-quarter earnings call, is intended to generate new advertising revenue as growth in Google’s core Search advertising business slows. Google Search revenue grew 12% year over year in the quarter, compared with 17% in the second quarter and 19% in the first; Alphabet shares fell 8% after the results. Alphabet reported $127.6 billion in third-quarter revenue, up 25% year over year. Google Services, which includes Search, generated $96.3 billion, up 11%, while Google Cloud revenue rose 103% to $30.7 billion. Chief Business Officer Philipp Schindler said click-through rates for sponsored product listings in AI Mode are comparable with organic listings, and Google’s user research found the ads relevant. CEO Sundar Pichai said Search queries recorded their fastest year-over-year growth rate in five years, without providing a figure. AI Mode queries are three times longer on average than traditional searches, and one in five AI Mode searches globally uses voice, images, or documents. Google also reported more than 50 billion visual searches per month and said the Gemini app has reached 1 billion monthly users.