Google expands ads in its AI search mode to international markets
Alphabet, Google's parent company, said ads in its AI-powered search mode will roll out beyond the US. The announcement came with quarterly results, as growth in core search advertising continued to slow.
Alphabet, the technology group that owns the Google search engine, said on Wednesday it will bring ads in its AI-powered search experiences to international markets. The announcement came during its third-quarter earnings call with investors. The company is betting that generative AI can open new revenue streams while growth in its core search advertising business decelerates.
Results and market reaction
Alphabet reported revenue of $127.6 billion for the third quarter, up 25% year over year. Google Search revenue, however, grew 12%, down from 17% in the second quarter and 19% in the first. Alphabet shares fell 8% after the results were published.
The Google Services division, which includes Search, generated $96.3 billion, up 11% year over year. Google Cloud revenue rose 103% to $30.7 billion.
Ads in AI Mode
Philipp Schindler, Google's chief business officer, said the company is scaling ads within AI overviews and AI Mode to more users and queries, taking its monetization footprint global for the first time. Multi-turn ads are also being offered alongside the U.S. rollout.
According to Schindler, click-through rates for sponsored product listings in AI Mode are already comparable to those of organic listings. The company's user research also indicates that people find the ads relevant. The move builds on new Gemini-powered ad formats announced in May.
Search usage
Google CEO Sundar Pichai said Search queries grew at their fastest year-over-year pace in five years, though he did not give the exact figure. Queries in AI Mode are on average three times longer than traditional searches, and one in five AI Mode searches globally involves voice, images or documents. Visual searches have surpassed 50 billion per month.
