What happened
According to The Decoder, Google's stock loses up to ten percent on the exchange. The trigger is search revenue that grew by around twelve percent in the third quarter, while analysts had expected 15 percent. In the earnings call, management partly confirmed that the rapidly growing AI mode is currently harder to monetize than classic search.
The cloud as a counterweight
The cloud division grew 103 percent year on year to 30.7 billion US dollars. According to the source, operating income rose from 3.6 to 11.1 billion US dollars, and the operating margin from 23.7 to 36.2 percent. In the third quarter alone Google invested 51.4 billion US dollars; according to the source, investments for 2027 are planned to be "significantly" higher.
Background
According to manager Philipp Schindler, among other factors the "lower monetization" in AI mode affects the result. According to Google, the annual growth rate of search queries reached its highest value in five years. Google also announced it will expand its advertising program for chatbots in the US and internationally.
Assessment
The source notes that classic search has long been declared dead yet continues to grow. Whether the lower monetization of AI mode is lasting cannot reliably be derived from the available information. For companies that use Google advertising, the announced expansion of the chatbot advertising program may be relevant.
Sources
Editorially owned by Ideal Syka. Sources and method: Newsroom & method. Tips and corrections: ai@i6eal.de.
