Google hasn’t figured out how to make AI pay like its search engine
Alphabet reported that search queries are at their fastest growth rate in five years, but search revenue growth decelerated to 12% year-over-year in Q3, down from 17% in the previous quarter. Paid click growth also declined from 13% to 8%. This slowdown is noteworthy given Alphabet's massive capital expenditure of roughly $200 billion this year, primarily allocated to AI infrastructure and capabilities.
Key points
- Search query growth at five-year high, but revenue growth slowed to 12% YoY in Q3
- Paid click growth declined from 13% to 8%, indicating monetization challenges
- Massive AI infrastructure investment ($200B annually) not yet translating to expected revenue gains
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