Google is expanding its AI-powered Search advertising formats to international markets, aiming to generate new revenue streams as growth in its core Search ad business decelerates. The announcement was made during Alphabet’s third-quarter earnings call, where the company reported $127.6 billion in revenue, a 25% increase year over year. However, Search advertising growth slowed to 12% in the third quarter, down from 17% in the previous quarter.
Philipp Schindler, Google’s chief business officer, explained that the company is scaling high-quality ads within AI-generated Search overviews globally for the first time. This expansion includes multi-turn ads and AI Mode ads in the U.S., with early data showing click-through rates for sponsored product listings in AI Mode comparable to organic results. User research also indicates that people find these ads relevant.
This initiative builds on Google’s May introduction of Gemini-powered ad formats, such as conversational discovery ads that interact with user queries and sponsored recommendations embedded in AI-generated answers. CEO Sundar Pichai highlighted that Search queries have grown at their fastest pace in five years, driven by AI features that encourage longer, more complex, and multimodal searches involving voice, images, and documents.
Pichai noted that queries in AI Mode are three times longer on average than traditional searches, and one in five AI Mode searches globally includes multimodal inputs. Google also reported surpassing 50 billion visual searches per month, underscoring the shift in how users engage with Search.
Alphabet’s Google Services division, which includes Search, generated $96.3 billion in revenue, up 11% year over year, while Google Cloud revenue surged 103% to $30.7 billion. The quarter also saw the release of Gemini 4 Argon, the Gemini app reaching 1 billion monthly users, and the launch of the Pixel 11 lineup.