Google’s third-quarter earnings call reports its strongest year-over-year query growth in five years, explaining that AI Mode is creating additional searches. Google also laid out its plan to further transition away from classic Search toward a more agentic, task-driven experience.
Strongest Query Growth In Five Years
The Q3 earnings call highlighted strong search query growth and the significant role AI Mode played in driving it. The company described its year-over-year query growth as its strongest in five years, including more searches with commercial intent, tying it to double-digit growth in Search advertising revenue.
Yet the earnings call made it clear that there’s a gap between the query growth and Search advertising revenue: AI Mode is driving additional queries, but those interactions generate less advertising revenue.
The takeaway:
Google is reporting the strongest search query growth in five years but the web ecosystem is seeing the lowest levels of referrals from Google. The earnings call confirms what search marketers and site owners already know and the fact that query growth is at all time highs will no doubt sting.
Sundar Pichai crowed:
“Search has strong momentum. Our AI investments are driving increased usage and overall query growth, including commercial queries. In fact, our year‑over‑year query growth rate is the highest it’s been in the last five years.
…Let’s turn to Search, which is bringing the benefits of AI to more people than any other product in the world. Just like our shift to mobile over a decade ago, we are focused on
building the best Search user experience, followed by monetization.”
Philipp Schindler, SVP and CBO, at Google boasted of growth, including with AI Mode, but also explained that currency exchange rates (foreign exchange aka FX) was the reason for a slowdown in advertising growth. He also conceded AI Mode was monetizing at a lower rate.
Schindler explained
“In Q3, Search grew 12% year‑over‑year to $63 billion, and when you look at the change in growth rate from Q2 to Q3, there were a few drivers here.”
First, there was FX. It was the single largest driver of Search deceleration relative to Q2.
…it’s worth noting that the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode. To be clear, we feel very good about our trajectory here. Our ad experiments have shown promising results and we’re now scaling ads within both AI Overviews and AI Mode to more users and more queries; including, as I mentioned, international markets and multiturn ads in the U.S.”
Anat Ashkenazi, SVP and CFO, Alphabet and Google also boasted about high query growth:
“We’re in a unique position to be able to monetize our AI investments across many products that reach billions of users and enterprises. Our AI investments in Search are driving our highest query growth in half a decade.”
Google Is Transforming Search To A Task-Completion Engine
Another search trend that was called out was the transformation of Search into a task-based experience. CEO Sundar Pichai described AI agents as a new stage in Search’s evolution, enabling Google to satisfy needs that were previously not possible with classic Search.
The agentic transformation of Search is something that will be connected across Search, Gemini, Chrome, Android, and Workspace. Pichai viewed this transition as an opportunity to expand what Search can do but unfortunately he said nothing about what effect this transformation may have on the web ecosystem.
Pichai explained how Search is transforming:
“One area I’m excited about is helping people get things done, be it booking reservations, filling in forms, scheduling appointments, or making purchases. …People already put their trust in Google to get things done in their daily lives; and our leadership here remains an important differentiator.
…As a next step, we’re bringing these features to Search. And also, of course, to our billion users on the Gemini app. People are already using the Gemini app to do more than ask questions; they’re using it to do things, including complex, multi‑step agentic queries. Our Gemini 4 series has been a really big step forward here and has already been handling these complex tasks really well.”
See also: Google Reveals How AI Search Is Reshaping What Users Query
AI Agents Are The Unifying Layer
Pichai also returned to the theme of AI agents as a “unifying layer” across all of their products.
He explained:
“Agents will operate as a unifying layer across our products, so you’ll see us extend these agentic experiences beyond Search and the Gemini app to Chrome, Android and our Workspace products as well.
…just like a few years ago, being able to incorporate AI chat use cases in Search allowed people to ask more and do more in Search, which is what is playing out in our usage.
I think agents would, again, be an opportunity to expand the types of problems we solve for our users.
I think people always underestimate all the components you need to deliver these complex experiences for users. And Search on the surface looks simple, but there’s extraordinary deep levels of investment and things we have built over time, like Knowledge Graph being an example.
And so our understanding of the world, et cetera.
So, I think I’m excited about agents, and I would view it as a new frontier, which brings in a new set of use cases to Search, and so we are excited to work through that.”
Google’s Q3 earnings call makes it clear that classic Search is increasingly going away in favor of of a more task-based orientation. SEOs talk about Answer Engine Optimization but Google’s not interested in providing answers. The future of Search is about helping users complete tasks, with Search being the starting point and another Google product at the other end.
Google intends to use AI agents across its products to give people more reasons to stay within Google’s ecosystem. That’s pretty bad news for SEOs and site owners because there is nothing in that scenario that speaks toward sending more referrals to the open web.
Featured Image by Shutterstock/Mistry Harsh
