Google’s search revenue growth decelerated for the second consecutive quarter in the third quarter of 2026, primarily due to challenges in monetizing its AI Mode, currency fluctuations and retail sector impacts.
Alphabet’s Google Search & Other revenue climbed 12 percent year-over-year to $63.35 billion, but the pace of expansion was slower than previous periods, according to the company’s latest earnings report.
Chief Business Officer Philipp Schindler identified lower monetization within AI Mode as a key contributor to the decelerated growth. He also cited currency movements as the most significant factor for the quarter-over-quarter slowdown, noting a small year-over-year headwind.
Despite these challenges, Google is actively expanding its advertising capabilities within AI Mode. The company plans to roll out ads in AI Mode to 10 additional markets and launch follow-on question functionality in the United States, Schindler said.
CEO Sundar Pichai stated that investments in artificial intelligence have driven the highest year-over-year Search query growth rate in five years. This growth includes a significant increase in commercial queries, Pichai added.
J.P. Morgan analyst Doug Anmuth had previously highlighted the potential impact of AI integration on Google’s core search advertising business.
The company’s financial leadership, including CFO Anat Ashkenazi, acknowledged the various factors influencing revenue performance during the earnings call.
Google’s AI development efforts, spearheaded by individuals like Shashi Thakur, continue to be a strategic priority for the company, influencing both product innovation and monetization strategies.
Source: Search Engine Journal
