Alphabet reported that Google Search query volume reached its fastest growth rate in five years during the third quarter, yet total revenue increased by only 12 percent year over year. This figure represents a slowdown from the roughly 17 percent growth seen in the previous period, while paid click revenue dropped from 13 percent to 8 percent. The company plans to spend approximately 200 billion dollars on infrastructure to support artificial intelligence throughout the current fiscal year. Investors have reacted negatively to these figures, driving Alphabet shares down by about 14 percent since the earnings announcement. The disconnect between rising user engagement and stagnant monetisation highlights a specific challenge in converting AI-driven search features into direct income.
Google Search AI Overviews now occupy a prominent position on results pages, potentially reducing the number of paid clicks available to advertisers. If users find answers directly in the AI summary without needing to visit sponsored links, Google’s primary revenue model faces pressure despite the surge in traffic. The company must determine whether it can charge for these AI-generated answers or if the current structure will continue to limit earnings growth.
- Search query growth is the fastest in five years
- Revenue growth slowed to 12 percent year over year
- Alphabet shares have fallen by approximately 14 percent
