Google Takes AI Mode Ads Global as Search Growth Slows to 12%
Google takes AI Mode ads worldwide as Alphabet's Q3 revenue rises 25% to $127.6 billion, while Search ad growth slows to 12% and shares fall 8% after earnings.
Summary
Google expanded AI Mode advertising into international markets on October 28, 2026, while introducing multi-turn ads in the U.S. Alphabet’s third-quarter revenue rose 25% year over year to $127.6 billion, but shares fell 8% as Google Search revenue growth slowed to 12%, from 17% in the second quarter and 19% in the first. Google Services revenue increased 11% to $96.3 billion, while Google Cloud surged 103% to $30.7 billion.
Chief business officer Philipp Schindler said click-through rates for sponsored product listings in AI Mode are comparable to organic listings, while Google research indicates users find the ads relevant. The expansion follows May’s Gemini-powered conversational discovery ads and sponsored recommendations inside AI answers.
CEO Sundar Pichai said Search queries grew at their fastest year over year rate in five years, without disclosing the rate. AI Mode queries average three times the length of traditional searches, one in five globally uses voice, images or documents, and visual searches exceed 50 billion monthly. The quarter also included Gemini 4 Argon, the Gemini app reaching 1 billion monthly users, and the Pixel 11 launch.
Positives
- Alphabet’s third-quarter revenue rose 25% year over year to $127.6 billion.
- Google Cloud revenue surged 103% to $30.7 billion.
- Sponsored product listings in AI Mode generate click-through rates comparable to organic listings.
- Search queries recorded their fastest year over year growth in five years, although Google withheld the exact rate.
- The Gemini app reached 1 billion monthly users, while visual searches surpassed 50 billion per month.
Risks & concerns
- Google Search revenue growth slowed to 12%, from 17% in the second quarter and 19% in the first.
- Alphabet shares fell 8% following the third-quarter results.
- Google must establish AI advertising as Search growth decelerates, but it disclosed no AI ad revenue figures.
- Sundar Pichai did not disclose the exact growth rate behind Search’s strongest query expansion in five years.