Google is expanding AI-powered search ads to international markets, seeking new revenue sources as growth in its core search advertising business slows. The news was disclosed during Alphabet's third-quarter earnings call on Wednesday. The company's revenue for the quarter was $127.6 billion, up 25% year over year, but its stock fell 8% after the earnings release.
Google's Search business grew 12% year over year in the third quarter, down from 17% in the second quarter and 19% in the first quarter. The continued slowdown increases the pressure to turn AI features into ad revenue. Google Chief Business Officer Philipp Schindler said the company is extending high-quality ads to more users and search queries, presenting them in AI Mode, and expanding its monetization model globally for the first time. Meanwhile, the U.S. market will roll out multi-turn ads and AI Mode ads.
Preliminary results show that click-through rates for sponsored product listings in AI Mode are already comparable to those for organic search results, and user research also indicates these ads are relevant to the content. This move follows Google's new Gemini-based ad formats introduced in May, including conversational discovery ads that can answer user questions and sponsored recommendations integrated into AI-generated answers.
Google CEO Sundar Pichai said search query volume grew year over year at its highest rate in five years, with AI features driving users to make longer, more complex queries. In AI Mode, the average query length is three times that of traditional search; one-fifth of AI Mode searches worldwide involve voice, images, or documents, and visual search volume has exceeded 50 billion per month. He emphasized that Search enables more people to benefit from AI, and user queries are longer, more personalized, and more diverse.
Alphabet's Google Services segment (including Search) generated $96.3 billion in revenue, up 11% year over year; Google Cloud revenue reached $30.7 billion, soaring 103% year over year. In the same period, Google released Gemini 4 Argon, the Gemini app reached 1 billion monthly active users, and the company launched the Pixel 11 series. As generative AI reshapes search interactions, Google is accelerating the transformation of AI capabilities into sustainable ad revenue, and the success of its international expansion will affect the landscape of the search advertising market.