Google's search revenue Ferrari hits an AI-powered speed bump

The biz appears to have traded its high-performing search advertising business for the mediocre monetization of AI Overviews and AI Mode, a misstep that contributed to investor concerns as Alphabet lost around $500 billion in market value despite management's attempts to reassure Wall Street. Google's year-over-year search revenue growth slowed from 17 percent in Q2 to 12 percent in Q3. It's still headed in the right direction, but at a slower rate.

During Alphabet's conference call for investors, Douglas Anmuth from JPMorgan Chase & Co asked whether that's because Google is showing fewer ads in AI Overviews and AI Mode than it shows in its traditional search results. Chief business officer Philipp Schindler cited several reasons for that: foreign exchange rates, Europe's elimination of its customs-duty exemption, and "the lower monetization we were seeing in AI Mode."