Google expands AI Search ads globally as core ad growth slows

Google announced it is bringing ads in its AI-powered Search experiences to international markets, betting generative AI can open new revenue streams even as core search advertising growth slows. The announcement came during Alphabet's third-quarter earnings call, where the company reported $127.6 billion in revenue, up 25% year over year, but Search advertising growth decelerated to 12% from 17% in the previous quarter and 19% in the first quarter. Alphabet shares fell 8% following the results. Google Chief Business Officer Philipp Schindler said the company is scaling high-quality ads within AI Overviews and AI Mode to more users and queries, including expanding monetization globally for the first time, alongside multi-turn ads and AI Mode in the U.S. Early results suggest the formats are working, with click-through rates for sponsored product listings in AI Mode comparable to organic listings, and user research indicating ads are relevant. The move builds on Google's May announcement of Gemini-powered ad formats. CEO Sundar Pichai said Search queries grew at their fastest year-over-year rate in five years, with AI Mode queries three times longer on average than traditional searches and one in five involving voice, images, or documents. Alphabet's Google Services division generated $96.3 billion in revenue, up 11% year over year, while Google Cloud revenue surged 103% to $30.7 billion. The quarter also saw the release of Gemini 4 Argon, the Gemini app reaching one billion monthly users, and the launch of the Pixel 11 lineup.

(Source：TechCrunch)