Alphabet Search Revenue Growth Decelerates Amid Shifting User Behavior
Alphabet's core Google Search business experienced a deceleration in revenue growth, climbing 12% year-over-year in the third quarter compared to 17% in the previous quarter. While management warned of continued pressure on fourth-quarter revenue, they noted that search query volume has reached its highest year-over-year growth in five years. The shift in user behavior involves longer, more personalized, and multimodal queries using text, voice, and images. Despite concerns that AI might disrupt the traditional search model, Alphabet is integrating ads into new interfaces like AI Overviews and AI Mode. Management believes these new surfaces will eventually allow for better ad targeting and revenue reacceleration as they leverage generative AI to enhance user engagement.
Topics: AI impact on search Alphabet earnings Google Search revenue Search query trends