Google’s search growth outpaces its AI monetization
Google’s search activity is expanding faster, but Alphabet has yet to translate that momentum into a clear boost from AI-related search products.
In its third-quarter earnings report, Alphabet said search queries were growing at their fastest rate in five years. Search revenue nevertheless grew 12% year over year, down from about 17% in the previous quarter. Growth in paid clicks—the ads that generate revenue for Google—also slowed, from 13% to 8%.
The disparity illustrates a central problem for Google: AI is helping drive more usage of search while changing established economics around queries, clicks, and advertising. Alphabet is simultaneously planning to spend about $200 billion on infrastructure this year, largely in support of AI.
Although paid clicks were still rising substantially, the slower growth rate is unlikely to provide the direction investors wanted from a company making such large AI investments. Google still needs to show that expanding search demand can generate revenue at least as effectively as its traditional advertising business.