Google Search growth slowed to 12% year over year in the third quarter of 2026, even as Alphabet said queries rose at their fastest pace in five years. Search Engine Journal put Search & other revenue at $63.35 billion, essentially flat with the prior quarter’s $63.27 billion. TechCrunch said shares fell 8% after results that still showed $127.6 billion in company revenue, up 25%, and Google Cloud up 103% to $30.7 billion.
Key Takeaways
- Search and other revenue rose 12% to $63.35 billion in Q3 2026.
- Growth slowed from 19% in Q1 and 17% in Q2; shares fell 8%.
- Lower AI Mode monetization was one reason Search ad growth slowed.
- AI Mode ads expanded to 10 countries; U.S. multi-turn ads launched.
Why Google Search Growth Lagged the Queries
J.P. Morgan’s Doug Anmuth asked why ad revenue lagged that query surge. Chief Business Officer Philipp Schindler said foreign exchange was the biggest factor versus the second quarter. Some Asia-Pacific retail advertisers were affected after the EU ended its de minimis exemption for low-value imports, and media and entertainment spending normalized after a strong second quarter.
The strong growth in AI Overviews had an impact because of the lower monetization we were seeing in AI Mode.
Schindler said that on the earnings call, Yahoo Finance reported. He did not say what that monetization was lower than, or by how much. CFO Anat Ashkenazi said currency was a small year-over-year headwind and a larger one versus last quarter, with Search lapping an acceleration from the second half of 2025.
CEO Sundar Pichai told analysts the product still comes first. “Just like our shift to mobile over a decade ago, we are focused on building the best Search user experience, followed by monetization,” he said, according to Search Engine Journal.
| Metric | Figure |
|---|---|
| Search revenue growth, Q1 / Q2 / Q3 2026 | 19% / 17% / 12% |
| Q3 Search & other revenue | $63.35 billion |
| Prior-quarter Search revenue | $63.27 billion |
| Google Services / Cloud | $96.3 billion, up 11% / $30.7 billion, up 103% |
| Alphabet revenue / share move | $127.6 billion, up 25% / shares down 8% |
Longer Queries, Lower AI Mode Monetization
Pichai said AI features are changing Search. AI Mode queries are three times longer on average than traditional searches, TechCrunch reported, and one in five AI Mode searches globally involves voice, images, or documents. Year-over-year query growth, including commercial queries, is the highest in five years. He did not disclose the rate.
Schindler said many new questions are upper-funnel and that the majority of AI Mode queries are incremental, which he said creates more monetization opportunities over time. For marketers, that is the tension: more questions did not produce faster ad sales.
How Google Is Expanding AI Mode Ads
On the same call, Schindler said the company is scaling high-quality ads within AI overviews in AI mode to more users and queries and taking its monetization footprint global for the first time. Multi-turn ads on follow-up questions were announced for the United States. Marketers comparing formats can review tests of AI Mode ads using Gmail and Photos context.
- New markets: Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines, and Singapore.
- Q4 2026: more locales, including Brazil, Mexico, and the U.K.
- English-language ads; Pakistan is limited to text ads.
- Search, Shopping, and Performance Max are eligible by default and cannot opt out separately.
Shashi Thakur, VP and GM of Google Search Ads, wrote that people find the ads highly relevant. “In fact, click-through rates are already similar between sponsored and organic product list items within AI Mode.” Search Engine Journal said the comparison is internal U.S. data from August 20 through September 3, 2026. Thakur’s May 2025 line that AI Overviews generate revenue “at the same rate” did not cover AI Mode.
What Buyers Cannot Opt Out Of
Search Engine Journal reported that advertisers cannot target AI Overviews or AI Mode individually. Negative keywords and brand exclusions still apply. Campaign setup decides which questions can show an ad.
- Exact and phrase match can serve on direct commercial intent, not on broader exploratory questions.
- AI Max for Search, broad match, Shopping, and Performance Max qualify for both.
- AI explainer text is written by Gemini from the query, the AI response, and public sources, including the advertiser’s site. Advertisers cannot create, edit, approve, or opt out.
- Results fold into standard campaign and search-terms reports. They are not split out.
For search buyers, spend can enter AI Mode without a report that isolates yield. Exact and phrase match miss exploratory questions, while broader campaign types enter those auctions. Executives have already cited lower AI Mode monetization as one reason growth slowed.
In Q4, Ashkenazi expects a slightly larger currency headwind, mostly in Search and YouTube ads, and pressure from lapping last year’s acceleration. Pichai’s second-quarter line that AI features in Search send “billions of clicks to websites every week” was not repeated, so site owners still lack an updated traffic count.
