Google expands AI-powered Search ads globally as core ad growth slows
Google is expanding its AI-powered Search ads to international markets, a move aimed at bolstering revenue as growth in its core search advertising business slows. Alphabet’s third-quarter earnings reported $127.6 billion in revenue, a 25% year-over-year increase, but Google Search revenue growth decelerated to 12%, down from 19% in the first quarter.
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Ads enter AI-powered Search experiences
Google is rolling out ads within its AI-powered Search experiences to international markets, according to claims reported by TechCrunch. These ads, which appear in features like AI Overviews, are part of a broader push to create new monetization opportunities as growth in traditional search advertising plateaus. Google’s user research reportedly indicates that users find these ads relevant, though specifics on performance metrics remain unconfirmed.
Decelerating growth in core search advertising
Alphabet reported $127.6 billion in revenue for the third quarter, a 25% year-over-year increase. However, Google Search revenue growth slowed to 12% in the same period, down from 17% in the second quarter and 19% in the first. This deceleration reflects broader challenges in maintaining the rapid expansion seen in earlier quarters, despite strong overall performance in other segments like Google Cloud.
The company’s Google Services division generated $96.3 billion in revenue, an 11% year-over-year increase, while Google Cloud revenue surged 103% to $30.7 billion. Alphabet’s shares fell 8% following the earnings report, signaling investor concern over the slowdown in its core advertising business.
AI and visual search as new revenue drivers
Google is betting on AI and visual search to offset slower growth in traditional search ads. Queries in AI Mode are reportedly three times longer than conventional searches on average, suggesting higher engagement. Philipp Schindler, Google’s Chief Business Officer, stated that one in five AI Mode searches globally now involves voice, images, or documents.
The company has also surpassed 50 billion visual searches per month, a milestone that underscores the growing importance of non-text-based search. The Gemini app, which powers many of these features, has reached one billion monthly users, reflecting its rapid adoption.
Broader context for Google’s AI investments
Google’s expansion of AI-powered ads aligns with its recent investments in AI-driven products, including the launch of Genie 4 by Google DeepMind. Genie 4 is an AI world model designed for interactive, photorealistic simulations, with applications in robotics, gaming, and film prototyping. While Genie 4 is currently available as a limited research preview, it highlights Google’s focus on integrating AI into diverse use cases beyond search.
The company has also introduced gaming features for Android Auto, allowing users to play mobile games while parked. This move targets downtime scenarios like EV charging, though it operates in a different segment compared to its advertising and cloud businesses.
What this means
Lazyfounder analysis — our interpretation, not reported fact.
Google’s push into AI-powered Search ads is a direct response to the decelerating growth of its core advertising business. For founders and operators, this signals a shift in how digital advertising budgets might need to be allocated. If Google’s AI-driven ad formats gain traction, competitors like Microsoft, Amazon, or emerging startups in the ad-tech space may accelerate their own AI-driven monetization strategies.
The slowdown in Search ad growth also underscores the risks of relying on a single revenue stream, even for a dominant player like Google. The company’s ability to diversify—whether through AI, cloud computing, or other products—will be critical in maintaining investor confidence. For operators in the ad-tech space, this is a reminder to monitor how AI is reshaping user engagement and ad relevance, as longer queries and visual searches could change the dynamics of ad targeting and performance measurement.
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Sources
- TechCrunch · 2026-10-28
Google expands AI Search ads globally as core ad growth slows
This story is an original summary drafted with AI by Lazyfounder from the reporting listed above and checked by automated validation. Facts are attributed to their original publishers; sections marked as analysis are Lazyfounder's. Where a source is in another language, facts were machine-translated and quotations are reported, not reproduced. Read the original coverage via the links, and see our AI policy and corrections policy.
About the author
Editor, Lazyfounder
Tarun Mottlia edits LazyFounders, covering Indian startups, funding rounds, AI and product launches. Every story on the site is AI-assisted and checked against its cited sources before publication.
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