Google Search Queries Accelerate as AI Mode Monetization Trails
Alphabet reported its fastest growth in Google search queries in five years in the third quarter, while revenue from Search and other sources grew more slowly than in the first half of the year. The results have put a sharper focus on a business question for marketers: whether Google’s expanding AI search experiences can generate advertising revenue at the rate of traditional search.
Search and other revenue rose 12% year over year to $63.35 billion, according to Alphabet’s earnings release. Growth was 19% in the first quarter and 17% in the second. The third-quarter figure was about $1.6 billion below analyst expectations, and CNBC reported it was the second consecutive quarter that search revenue missed estimates.
Google Chief Business Officer Philipp Schindler identified growth in AI Mode queries as one factor in the slowdown, saying it had an impact because of the lower monetization seen in AI Mode. That comment links the company’s increased use of AI search directly to a revenue trade-off, although Google did not quantify how much of the deceleration it attributed to AI Mode.
Several factors shaped the quarter
On the earnings call, Schindler named four contributors to the change in search growth from the second quarter to the third: foreign exchange, reduced spending by some retail advertisers in Asia-Pacific, a normalization in media and entertainment spending, and rapidly growing AI Mode queries that currently monetize less than traditional search. The retail pullback followed the EU’s elimination of its de minimis exemption for low-value imports. Media and entertainment spending had been elevated in the prior quarter, which included the FIFA World Cup.
Alphabet Chief Financial Officer Anat Ashkenazi also noted that the company was comparing results with the period when search growth began accelerating in the third quarter of 2025. That tougher comparison affects year-over-year growth for a time, but does not by itself explain how well AI Mode earns revenue per query.
Foreign exchange was described by Schindler as the largest driver of the deceleration. Alphabet’s company-wide figures show revenue growth of 25% in the third quarter, with currency a slight headwind to year-over-year growth. Sequentially, total revenue rose 6% as reported and 7% in constant currency. Alphabet does not publish a constant-currency growth figure for Search alone, so the precise impact of currency on the search results cannot be established from the figures provided.
The distinction between the largest individual factor and the main explanation matters for advertisers and analysts. The earnings call listed multiple influences, but only AI Mode represents a product expansion that Google is actively pursuing and that the company explicitly linked to lower monetization. The quarter offers evidence of a gap between query growth and revenue growth, without resolving how much of the gap is attributable to each factor.
Query growth needs a clear definition
CEO Sundar Pichai said Google’s year-over-year query growth rate was at its highest level in five years, but the company did not disclose the rate or explain how queries are counted within an AI Mode session. According to comments on the call, AI Mode queries average three times the length of traditional searches, and the product is expanding to multi-turn conversations.
Without a published counting methodology, marketers should be cautious about treating query growth as a direct measure of how many additional people are searching or how much commercial intent has increased. Longer conversations could produce more counted query turns, but the available information does not establish whether Google counts each turn separately. That uncertainty is distinct from the revenue figure, which Alphabet reports as a financial result.
Google is expanding ads in AI search
Google’s response is not to slow the rollout of AI Mode. Schindler said the company is scaling ads in AI Overviews and AI Mode to more users and queries, taking AI Mode ads international for the first time, and introducing multi-turn ads in AI Mode in the U.S. He described the results of Google’s ad experiments as promising, without providing a performance metric.
Schindler also said click-through rates were already similar for sponsored and organic product-list items within AI Mode. That comparison suggests that paid and unpaid placements may compete for attention within the same answer experience. It does not establish how placements affect organic visibility across categories, or how advertising will change as the products expand.
Google has said that most AI Mode queries are incremental and that many are upper-funnel queries with new commercial intent. Those are company claims, and external marketers cannot verify them from the earnings disclosure alone. For brands, a practical response is to document which AI answers cite their products or content, which competitors appear, and when sponsored placements are present. Repeating that review over time can help teams assess changes in visibility alongside referral traffic and paid media results.
The next earnings reports will show whether search revenue growth changes as comparison effects and currency headwinds shift. For now, Alphabet’s third-quarter results establish a meaningful tension: Google says search queries are growing rapidly, while its business chief acknowledges that AI Mode queries currently monetize less than traditional search. How quickly Google can narrow that gap will matter to marketers evaluating both paid placements and organic presence in AI-generated answers.
