The move announced alongside the quarterly results
Google is extending to new international markets the ads that appear in its AI-based Search experiences. The decision, reported by TechCrunch, was announced on Wednesday during the third-quarter earnings call of parent company Alphabet. According to the source, Google is betting on generative AI’s ability to open up new revenue opportunities as growth in advertising tied to traditional Search slows.
Philipp Schindler, chief business officer of Google, told investors that the company is expanding the presence of high-quality ads within AI-generated overviews in AI Mode, reaching more users and more searches. The new development concerns the international extension of monetization, announced alongside multi-turn ads and AI Mode in the United States, as reported by the source.
The numbers for the quarter
Alphabet closed the quarter with revenues of $127.6 billion, up 25% year over year. That was not enough to support the stock: according to TechCrunch, shares fell 8% after the results. The reason given is the slowdown in Search-related advertising: Google Search revenues grew 12% year over year, compared with 17% in the second quarter and 19% in the first.
The overall picture shows divisions with differing trends. Google Services, which includes Search, generated $96.3 billion, up 11% year over year. Google Cloud, by contrast, reached $30.7 billion, with growth of 103%. The source reports the two figures without explaining the causes of the strong acceleration in cloud.
The statements and the limits of verification
Google maintains that early indications for the new formats are positive. Schindler said that click-through rates for sponsored ads in AI Mode are already comparable to those for organic results and that user searches indicate the ads are perceived as relevant. These are company statements, not data that can be independently verified based on the available material.
CEO Sundar Pichai added that searches grew at the fastest annual rate in five years, without specifying the percentage. He also indicated that queries in AI Mode are on average three times longer than traditional ones and that one in five searches globally involves voice, images or documents. Google has surpassed 50 billion visual searches per month. Among other things, the actual profitability of ads in AI Mode and the exact markets involved in the expansion remain to be verified: the source does not list them.
