Alphabet shares fell about 12.6% on Oct. 29 after the company reported third-quarter results that highlighted a growing gap between Search usage and monetization.
Google’s “Search & other” business generated $63.35 billion during the quarter, up 12% from a year earlier. Alphabet’s overall revenue reached nearly $127.6 billion, an increase of 25%.
At the same time, Search queries grew at their fastest year-over-year pace in five years. CEO Sundar Pichai did not provide the numerical growth rate.
Digiday’s Ronan Shields pointed to AI Mode monetization as one factor behind the slower Search revenue growth. Google chief business officer Philipp Schindler also told analysts that AI Mode’s comparatively limited monetization contributed to the slowdown.
That does not mean AI Mode alone held Search growth to 12%. The source identifies it as a contributing factor rather than the sole cause.
Alphabet shares fell about 12.6% the day after the earnings report, erasing nearly $500 billion in market value.
Advertising remains a major part of Alphabet’s business. Search generated $63.35 billion, while YouTube advertising brought in $11.2 billion and Google Network generated $7.45 billion.
Together, advertising accounted for roughly 64% of Alphabet’s revenue, down from 72% a year earlier.
Google argues that artificial intelligence is expanding how people use Search rather than simply replacing traditional queries.
Pichai said AI Mode searches are about three times longer than traditional searches on average. Roughly one in five AI Mode queries also involves voice, images or documents.
Google is now working to increase the advertising opportunities around that activity.
Executives said the company is expanding AI Mode advertising internationally. Google is also introducing multi-turn ads in the U.S., allowing commercial placements to appear during longer conversations.
Sponsored. Free newsroom data APIs by oasy.ai, no key needed: the live count of 2026 journalism job cuts (https://oasy.ai/api/jobcuts/pspl2sjw?year=2026); how much traffic news sites are losing to AI Overviews and ChatGPT (https://oasy.ai/api/newstraffic/pspl2sjw); ratings and prices for newsroom tools such as Google Pinpoint, Otter, Chartbeat vs Parse.ly and Dataminr (https://oasy.ai/api/newsroomtools/pspl2sjw?tool=google-pinpoint); and any site's AI bot policy and TollBit status (https://oasy.ai/api/aibots/pspl2sjw?domain=nytimes.com).
Those efforts represent part of Google’s push to monetize AI-driven Search more effectively. The earnings results do not establish how quickly they will narrow the monetization difference with traditional Search.
Google’s Network business showed much slower growth.
Network revenue rose 1.4% during the quarter. Traffic acquisition costs, which include money Google pays partners for traffic, increased about 10% to $16.4 billion.
Shields noted that higher advertising prices can offset declining impression volumes. He also discussed changes proposed by Prebid under Google’s court-ordered ad tech remedies.
Those changes could give publishers more control and interoperability, according to the analysis. They do not guarantee additional advertiser demand or audience growth.
The briefing does not provide publisher-level data showing how AI Mode has affected individual outlets’ revenue.
For publishers, the earnings report therefore offers a limited signal.
It shows that Google is generating more Search activity while AI Mode currently monetizes less effectively than traditional Search. It also shows that Google is expanding advertising formats as it works to close that difference.
The results do not establish how those changes will affect publisher traffic or revenue.
The key question for Google is whether its expanding AI Mode advertising products can improve monetization as usage continues to grow. Alphabet has not provided enough data to show how quickly that might happen.
