# Google’s search revenue drops 12% as AI Mode queries grow

Digest AI · Marketing & Small Business · published 2026-11-05T20:00:58Z

Canonical: https://digestai.news/story/googles-search-revenue-drops-12-as-ai-mode-queries-grow

## Summary

Alphabet reported a 12% year-over-year growth in search and other revenue to **$63.35 billion** in the third quarter, down from **19%** in Q1 and **17%** in Q2. This marked the second consecutive quarter search revenue fell short of analyst expectations by about **$1.6 billion**, according to CNBC. Philipp Schindler, Google’s chief business officer, attributed the slowdown partly to **AI Mode queries**, which grow faster but monetize less than traditional searches. The company also cited foreign exchange fluctuations, Asian-Pacific advertiser pullback, and normalized media spending as temporary factors, though AI Mode remains a structural concern as its adoption accelerates.

Google’s year-over-year query growth hit a five-year high, though the definition of an AI Mode query—including multi-turn conversations—remains unclear. Schindler noted that **click-through rates for sponsored and organic listings in AI Mode are already similar**, signaling a shift where paid and organic placements compete directly within answers. The company plans to expand AI Mode ads internationally and introduce multi-turn ads in the U.S., aiming to bridge the revenue gap by increasing ad placements inside AI-generated responses.

## Key points

- Google’s search revenue grew 12% to **$63.35 billion** in Q3, down from 19% in Q1 and 17% in Q2
- AI Mode queries grow faster but earn less per query, contributing to slower monetization
- Click-through rates for sponsored and organic listings in AI Mode are now comparable

## Why it matters

The revenue gap between AI Mode’s usage and monetization forces Google to accelerate ad placements inside answers, reshaping how brands compete for visibility. SEOs must track organic vs. paid placements in AI-generated responses to adapt strategies before ad load increases further.

## Sources

1. [Google Search Queries Hit A 5-Year High, And Search Revenue Didn’t Follow via @sejournal, @DuaneForrester](https://searchenginejournal.com/google-search-queries-hit-a-5-year-high-and-search-revenue-didnt-follow/595485) (Search Engine Journal, 2026-11-05)

## Cite

Digest AI, "Google’s search revenue drops 12% as AI Mode queries grow", 5 November 2026, https://digestai.news/story/googles-search-revenue-drops-12-as-ai-mode-queries-grow

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