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Google Shares Fall 10% as Growth in Search Revenue Slows
Alphabet shares dropped 10% as search advertising growth slowed, highlighting the ongoing struggle to monetize AI-integrated search effectively.
What: Alphabet reported $127.6 billion in quarterly revenue, with Google Cloud exceeding expectations at $30.7 billion, but growth in core search advertising decelerated as the company integrates AI features.
Why it matters: Investors are questioning how quickly AI search can deliver the high-margin revenue growth associated with traditional link-based advertising.
Original article
Google's advertising business failed to deliver on analysts' estimates in the third quarter. The company is still figuring out how to translate AI into faster sales in its core web-search business. While Alphabet reported 25% revenue for the quarter, revenue from search advertising decelerated. Its cloud business exceeded analyst expectations, drawing in $30.7 billion out of Alphabet's total of $127.6 billion in sales.
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