Alphabet Reports Search Revenue Miss Amid Rising AI Competition and Negative Free Cash Flow

Alphabet (GOOGL) reported an earnings miss characterized by weaker-than-expected revenue in its core search segment, which grew 12% to approximately $63 billion. Despite record query growth, the disconnect between usage and revenue has raised concerns that AI agents and bots are beginning to disrupt traditional search monetization models. The company's financial health faced scrutiny as free cash flow dropped to a deficit of $9 billion for the quarter, significantly worse than estimates. While executives attributed the search deceleration partly to foreign exchange headwinds, analysts suggest the rise of personalized AI assistants could fundamentally shift how commerce begins, potentially bypassing Google's traditional ecosystem.

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