Google is extending advertising into its AI-powered search experiences across international markets, positioning generative AI as a new engine for revenue growth at a time when its traditional search advertising business is showing signs of deceleration. The expansion signals a broader strategic pivot for the company as it works to translate its heavy investment in artificial intelligence into measurable commercial returns.

The announcement was made during Alphabet's third-quarter earnings call, where the company reported total revenue of $127.6 billion, representing a 25% increase compared to the same period a year earlier. Despite the headline growth figure, Search advertising continued to slow, and investor reaction was swift - Alphabet shares dropped 8% following the earnings release.

Google Search revenue climbed 12% year over year in the third quarter, a notable step down from the 17% growth recorded in the second quarter and the 19% expansion seen in the first quarter of the year. The consecutive deceleration is putting pressure on the company to demonstrate that its AI-integrated search features can generate meaningful advertising income and sustain the business long term.

Ads in AI Mode Going Global

Philipp Schindler, Google's chief business officer, addressed the expansion directly during the investor call. He confirmed that the company is scaling high-quality advertising placements within AI Overviews and AI Mode to a broader base of users and search queries, and that this monetization effort is now crossing international borders for the first time.

"We are now scaling high-quality ads within AI overviews in AI mode to more users and queries. This includes taking our monetization footprint global for the first time. Today, we're announcing the expansion of ads in AI mode into international markets alongside multi-turn ads and AI mode in the U.S."

Schindler also shared early performance data suggesting the new ad formats are gaining traction. According to his remarks, click-through rates for sponsored product listings appearing within AI Mode are already on par with those for organic search listings - a benchmark that advertisers and analysts typically watch closely. Internal user research conducted by Google further indicates that people are finding the ads contextually relevant rather than intrusive.

Building on Earlier Gemini-Powered Ad Formats

The international rollout builds on groundwork laid earlier this year. In May, Google announced a new set of ad formats powered by its Gemini AI models. Those formats included conversational discovery ads designed to respond dynamically to users' questions, as well as sponsored recommendations embedded directly within AI-generated answers. The latest expansion takes those concepts to a global audience while also introducing multi-turn advertising capabilities within AI Mode in the United States.

Multi-turn ads are particularly notable because they allow advertising content to evolve across a conversation rather than appearing as static placements. This reflects a broader shift in how Google is thinking about search interactions - not as isolated queries but as extended, dialogue-style exchanges between users and its AI systems.

Search Query Growth at a Five-Year High

Google CEO Sundar Pichai offered additional context around how AI is reshaping user behavior on the platform. He stated that Search queries grew at their fastest year-over-year rate in five years during the quarter, though he stopped short of providing a specific percentage figure. Pichai attributed this acceleration to the influence of AI features, which he said are encouraging users to engage with Search in fundamentally different ways.

One of the most striking data points Pichai shared was around query length. Searches conducted through AI Mode are, on average, three times longer than traditional search queries. This suggests users are engaging in more detailed, nuanced requests rather than the short keyword-based searches that have historically defined the product. He also noted that one in five AI Mode searches globally now incorporates voice input, images, or documents - a sign that multimodal search is becoming a mainstream behavior rather than a niche use case.

Google also disclosed that it has surpassed 50 billion visual searches per month, a figure that underscores the growing role of image-based discovery within its ecosystem.

"Search is bringing the benefits of AI to more people than any other product in the world. People are using our AI features more, searching in entirely new ways. Their queries are longer, personalized, and multimodal."

Segment Performance and Cloud Surge

Looking at Alphabet's business divisions, Google Services - the segment that encompasses Search, YouTube, and other consumer-facing products - generated $96.3 billion in revenue during the quarter, up 11% compared to the year-ago period. While that figure reflects continued growth, it also highlights the relative moderation in the core advertising business that has drawn investor attention.

In contrast, Google Cloud delivered a standout performance, with revenue surging to $30.7 billion - a 103% increase year over year. The Cloud division has become an increasingly important contributor to Alphabet's overall growth story, particularly as enterprise demand for AI infrastructure and services continues to accelerate across industries.

A Busy Quarter Across the Board

The earnings results come at the end of a quarter marked by significant product activity across Alphabet's portfolio. The company released Gemini 4 Argon, its latest AI model, and reported that the Gemini app has now reached one billion monthly active users - a milestone that places it among the most widely used AI applications globally. Google also launched its Pixel 11 smartphone lineup during the period, continuing its push to integrate its AI capabilities directly into consumer hardware.

Taken together, the quarter reflects a company in active transition - one that is working to redefine its most important product, Search, while simultaneously building out the infrastructure and applications it hopes will sustain growth in the years ahead. The international expansion of AI-powered ads represents one of the most direct tests yet of whether that strategy can translate into the kind of revenue momentum that investors and analysts are expecting.