Google search activity rises as advertising growth slows

Google’s search business is seeing more activity, but the pace at which that activity becomes advertising revenue has weakened as Alphabet prepares a major infrastructure investment focused largely on artificial intelligence.

Alphabet said in last week’s earnings report that search queries were increasing at their fastest rate in five years. Yet Google’s Search revenue rose 12 percent year over year in the third quarter, compared with about 17 percent in the previous quarter.

Growth in paid clicks, which generate advertising revenue for Google, also slowed, falling to 8 percent from 13 percent. The increase remains substantial, but the slowdown came as Alphabet plans to spend about $200 billion this year on infrastructure, largely to support AI. Alphabet shares have declined about 14 percent since the earnings report, according to the article. The figures highlight the challenge of turning expanding AI-related activity and investment into growth comparable to Google’s established search business.