Google is expanding advertisements in its AI-powered Search features to international markets as growth in its traditional search advertising business slows. The announcement came during parent company Alphabet’s third-quarter earnings call on October 28, when the company reported revenue of $127.6 billion, up 25% year over year.
According to Alphabet’s earnings announcement, Google Search revenue grew 12% in the third quarter, compared with 17% in the second quarter and 19% in the first quarter. Alphabet shares fell 8% following the results, despite the company’s overall revenue growth.
Google Expands Advertising in AI Search
Philipp Schindler, Google’s chief business officer, said the company is expanding ads within AI Overviews and AI Mode to more users and search queries. The expansion includes introducing AI Mode advertisements in international markets for the first time, alongside multi-turn advertising formats in the United States.
According to Schindler, click-through rates for sponsored product listings in AI Mode are already comparable to those of organic listings. Google’s user research also suggests that people find these advertisements relevant to their searches.
The expansion follows Google’s May announcement of new advertising formats powered by Gemini. These include conversational discovery ads that respond to users’ questions and sponsored product recommendations integrated into AI-generated answers.
AI Features Drive Longer and More Complex Searches
Google CEO Sundar Pichai said Search queries recorded their fastest year-over-year growth rate in five years, although he did not disclose the exact figure. He attributed the increase partly to AI features, which have encouraged users to submit longer, more personalized, and complex searches.
Queries submitted through AI Mode are three times longer on average than traditional Google searches. Pichai also reported that one in five AI Mode searches globally involves voice, images, or documents, while Google now processes more than 50 billion visual searches each month.
Alphabet Reports $127.6 Billion in Quarterly Revenue
Alphabet’s Google Services division, which includes Search, generated $96.3 billion in revenue, an 11% increase from the previous year. Meanwhile, Google Cloud revenue rose 103% to $30.7 billion, supported by demand for AI infrastructure, enterprise AI services, and cloud computing.
The earnings announcement followed several product developments during the quarter, including the September release of Gemini 4 Argon and the August launch of the Pixel 11 lineup. Google’s Gemini app also reached one billion monthly users during the period.
Alphabet reported operating income of $40.6 billion, up 30% year over year, with an operating margin of 31.8%. Net income available to common stockholders stood at $26.2 billion, while diluted earnings per share reached $2.12.
Featured image credits: Wikimedia Commons
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