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Google Says Lower AI Mode Monetization Weighed On Search Growth via @sejournal, @MattGSouthern

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Google Says Lower AI Mode Monetization Weighed On Search Growth via @sejournal, @MattGSouthern

Google Search revenue growth slowed for a second straight quarter, and lower AI Mode monetization was one reason given.

Alphabet’s (GOOGL) Google Search & Other line had a 12% increase in year-over-year revenue in Q3 2026 to $63.35 billion. Search revenue growth has been slowing down for two quarters now, after being at 19% in Q1 and 17% in Q2; and Search revenue was essentially flat compared to last quarter’s $63.27 billion.

On Alphabet’s earnings call, Chief Business Officer Philipp Schindler mentioned that lower monetization within AI Mode was one of three reasons for the slower growth.

In addition to announcing expanded availability of ads in AI Mode in ten additional markets, Alphabet also stated that it is launching ads in AI Mode follow-on question functionality in the United States. All existing Search, Shopping, and Performance Max campaigns are eligible by default and cannot opt out separately.

The biggest factor driving the search slow down compared to Q2 was, according to Schindler, currency movements. Retail also experienced an impact, he said, with certain Asia-Pacific advertisers affected by the E.U. eliminating its de minimis exemption for low-value imports. Media and entertainment saw spending normalize after a strong Q2 which included the FIFA World Cup.

Google CFO Anat Ashkenazi stated that currency movement was a small headwind to the year over year growth and a larger headwind to the quarter over quarter growth. Ashkenazi also mentioned that there was a tougher compare because the search growth continued to accelerate throughout the second half of 2025.


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