Google has been extremely aggressive in growing its Cloud business in the last few years and has been offering big incentives to companies willing to switch from other providers. Looks like that's beginning to pay off as companies start to pay the unsubsidized bills.
Their earnings missed by almost 30%, which is pretty huge in the stock market.
I think the bigger concern is that earnings misses are very rare for GOOG, and historically they've been able to hit almost any target that Wall Street expects. Their past earnings misses were all related to major macroeconomic events (2020Q1, which was the COVID shutdowns, 2022 all year with inflation from COVID/Ukraine + rate hikes, and 2019Q3 with the taper tantrum from Fed rate hikes), and most of them were more in the 5% range. A 30% miss, particularly with slowing revenue growth in their core business despite almost full monetization of commercial queries, could indicate that the golden goose is disintegrating.
For that matter, GOOG has been extremely correlated with macroeconomic indicators since about 2018, which means investors in the rest of the stock market should probably watch out. It's likely we're already in recession but don't know it.
> Their earnings missed by almost 30%, which is pretty huge in the stock market.
It's somewhat fake, as fake as last quarter's huge beat. It's basically due to their large share in SpaceX, which they have to mark to market at the end of the quarter. Anyway, that's not at all the reason for the freakout.
They can't juice, because advertisers are now good in calculating conversion rate, roas, cpa, etc, so they would shift budgets to other channels like overnight if see Google underperforming.
There's a reason why GSP (Generalized Second Price) auctions are called "truthful auctions", and that's because they elicit the true value as the bid from the advertiser (in theory).
So (in theory) advertisers will lower their bids if they're not getting the desired value from the clicks; and over time some will migrate budgets to other channels (like "influencers"? shudder ...).
Gotta love seeing the complaint calling out "exact match (close variant)". Google sure does love text embeddings because it massively increases the keyword-search matches for auctions. After all these years, they definitely have no intention of fixing it for the advertisers.
“Recently”?? Have people not seen the findings of the AdTech Antitrust lawsuit they lost? Y’all should google it (heheh) especially the ad auction rigging parts of it, including Project Bernanke.
What they’re doing now is just being a lot more overt about it, because they want to carve up their old cash cow to feed their AI ambitions before ChatGPT and Claude eat it up first.
I (and a non trivial number of people I knok) have switched to Kagi for search just to avoid having to deal with the bullshit that is the above the fold google search results.
Course, they win anyway because I also pay for youtube premium to avoid seeing ads..
Feels like the world is becoming a split between people who can afford not to be the product and people who cannot.
People take the ad supported internet for granted, and genuinely believe that if we could just put companies in their place, we could have an ad-free internet that is totally free to use.
> Search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LLM queries
Second sentence is empirically a complete lie.
Search volume is still growing, despite analysts asking on every call what Google is going to do about falling volume, and Google continuing to re-iterate: Search volume is still growing, as are clicks on ads.
I get it that everyone hates paying as much for clicks as they do now. You can hate it all you want. You can claim Google is lying about search volume and ads, but that would be massive securities fraud...
Haters gonna hate. It doesn't mean the king is dead.
Fascinating read, thanks! The counterpoint to "slaughtering the golden goose" is: If you're all in with AI, this is the rational thing to do, no?
If AI takes over, search becomes irrelevant, so better extract as much value from search as possible while it's decaying and not dead yet.
There's nothing intrinsic about Google search that makes it a monopoly. Monopolies usually hold their position because regulations make it prohibitive for competitors to form or because they control a rare resource. Google search does neither of these two things. Its just a better product compared to everything else out there and the market reflects that.
You forgot to exclude the "not usual" factors that allow monopolies to hold their position to rule Google out of the group.
For example, non-regulatory attempts at blocking of competitors, which Google does engage in due to their dominant position in mobile (of course, that's also just another better product)
Do they control the Trademark "Google"? Do they control the Domain Name "Google.com"?
Do they control the default Search engine for Android? For Chrome?
Did they pay to be the default Search engine on iPhone? On Firefox?
Are those rare resources? I'd say yes.
And you're conflating "illegally-maintained Monopoly" with "Monopoly." Whether they got there through using illegal tactics or not is a separate question from whether they are a Monopoly now. 90% - is that a high enough market share to qualify as a monopoly, when their annual revenue is like $224 billion? What percentage would be enough to convince you? Does it need to be 100%?
"Search" is a borderline obsolete concept. There is no separation between search, AI, information retrieval, knowledge synthesis, information tasks, etc.
am i remembering correctly that "google cloud" in the earnings isn't just developer's google cloud bills (that's google cloud platform), it's also basically any product where a consumer or enterprise pays money to google for anything other than advertising - google drive storage, gemini pro, enterprise google workspace plans...
> basically any product where a consumer or enterprise pays money to google for anything other than advertising
Not exactly - the consumer stuff (subscriptions and devices) falls under services, while cloud covers GCP, Workspace, and enterprise-specific cloud services (like maps etc).
Basically if you pay for it with a monthly sub on a personal google account (including Gemini stuff like Ai pro) it's services.
Not quite. Google Cloud is GCP, Workspace and Gemini Enterprise. Consumer products subscriptions like Youtube premium, Google storage and even Gemini (consumer) fall under "Google subscriptions", which is part of Google Services
Others want to nitpick but generally yes, before we had AI, the last craze was cloud, so they shuffled things around to the point that everything was "cloud". This is also how Oracle got to be the biggest "cloud" in the world!
Gemini is terrible, it's trash especially after downgrading to the free version. I have to prompt it two to three times for it to understand what I am asking it. It seemed better when I was paying for it while it's free competitor models (the other 4) always answer me right away.
The money is mostly paid by companies wanting to find customers and the AI companies like OpenAi and Antropic don't provide much of that. The biggest competitor is probably Facebook who I'm not sure are really booming at the moment?
How would you expect search forecasts to be met if most of the time you get "are you a robot" or clanker summaries if you are lucky.
Search no longer works and you are killing your most important product with AI that nobody wants. If search worked like in 2010, no one would use AI answers.
So if I understand it, search numbers are down (because AI is doing what Sam Altman originally saw - AI is a better search engine)
And Google knows it, so why not squeeze the current customers, whatever model AI takes it’s unlikely to be a word matching auction, this model is dead, grab the cash and go.
This is it exactly. Search is steady while GC is growing by leaps and bounds because all AI iniatives require cloud for hardware and GC is a good option for anyone unhappy with AWS or Azure. The graph makes it clear.
Search numbers are down because Google search has become crap.
I know a lot of people which I don't consider tech enthusiasts and they moved from Google to duckduckgo.
what ball? they're spending 100% of cashflow, taking out debt, and issuing stock.
so they're not conservative on capital investment, they're growing at 103%.
You cant:
1) win the personal agent (requires a vm for every user)
2) win cloud sales (requires selling your compute)
3) win model war (requires using your compute)
4) win the chip war (requires selling your tpu's themselvs)
Weirdly enough their issue is they're to small to fight every battle, MSFT+Nvidia+Meta+Oai+oracle is like 14T in market cap.
A few days ago a Google found me something I was searching for, but via ads and not search. In the middle of searching raw part numbers, the ad became 100% relevant. It was a weird experience clicking on the ad; something I never ever do. So maybe this is a bit of good news? Yardinflatables.com if you're curious.
Is this how we fix google search? Make advertisers have to provide ads that are actually helpful search results, sort of like https://xkcd.com/810/ but for search ads
I’ve had this exact experience a couple of times in the past few weeks. Their “sponsored” ads of a kind of product that I was looking for (based mainly on description for the use I was intending) gave better results than any AI model I tried to use to find a product that fit my specific use case.
Found it interesting that I’ve flipped my search tool usage in such a short time. I use models for most “searching” but then utilize Google Search as the last resort.
That’s wild. It’s possible that Google shows me relevant ads. But if it’s formatted anything like a sponsored result, I think my eyes just skip past it. Like after so many years I just have ad block built in to my retinas.
I wonder if one was actually useful, maybe I’d notice it?
Yeah Banner Blindness is definitely a thing, it's something to keep in mind with UI design where you can end up making something so in your face that the user just ignores it even harder. https://en.wikipedia.org/wiki/Banner_blindness
Oh yeah. I recently started with engaging with a vendor that has good SEO and I would just instinctively skip past their search result because it was one of those expanded ones.
We easily adapt and block out stuff we don't want to see.
In big cities we do this automatically - we don't even notice the dirt, parked cars, litter, people.. unless we consciously focus on them. I guess it is the same with ads, they lose their power as we adapt to them.
The solution is to force ads upon you and hope that you accidentally click on one due to sensory overload.
Or more ads.
This is exactly what the ad network is meant to do, and their ability to monetize this ability means competitor's ads (like meta) become less valuable.
Google successfully trained this human to click on ads.
Thankfully I never see any ads - ublock origin kills these
off. That includes the horrible UI choices Google made on
its search interface. A custom ublock origin rule filters
away the pointless "others also searched for pink cats"
while I was searching for epic skyscrapers. Evidently Google
tries to link-lose me here, wasting my time.
I've long suspected Amazon's search is so crappy because it makes their ads necessary to actually surface a product. I guess Google got the idea as well.
The worst part is I've seen search other video sites that used to surface exact titles stop working around the same time. I'm not sure how to reliably find things I know are there anymore.
I've had so much greater success using the built-in AI ("Alexa for search") that I no longer use the regular search except briefly. I imagine it will be destroyed eventually as regular search was, but for now it's dramatically better.
Is it really devastation? It's not like Search shrinked, it's that everything else grew so much. Yes, the landscape is shifting, but Google now has multiple legs to stand on, which should be a good sign to investors.
Around 2005, Google published MapReduce, THE parallel data processing paradigm. The ecosystem from Yahoo, Hortonworks etc overshadowed Google with Hadoop, Spark etc. Google then launched both paper and product when it came to cloud scheduling and transformers.
Lol devastation. Google Search is up 12% YoY, but since Google Cloud is up 102% YoY it took more percentage of the total revenue. Yeah this definitely look devastation.
Makes me want to own the stock now that they are more diversified. I will never understand why they didn't want to own all of Waymo but did for pretty much everything else.
GCP got really, really good in the last few years. The cross-account story is now better on GCP than on AWS. BigQuery, Spanner, Pub/Sub, GKE are all best-in-class. AWS has its advantages too: CloudFront, Lambda, S3, DynamoDB, and IPv6 support are all best-in-class. It really just depends on what your product's actual architectural needs are, and whether you have access to nosebleed budget to pay for it all (these services are all staggeringly expensive).
Both "search" and "everything else" are primarily advertising revenue[1], and advertising spend is always heavier in Q4 because of (Black Friday and) Christmas.
[1]: As the page says,
- "Search" means "ads on Google Search and on other Google properties such as Gmail, Maps and Google Play"
- "Everything else" means "YouTube ads, subscriptions and devices, Google Network and Other Bets".
Blaming AI is correct but perhaps not the way you think. I think a lot of people actually use other people's AI tools to do their searches now. Google's attempt to grab that back via their own AI tools is so far not really working. Google is no longer the go to tool for answering questions or doing research.
I used perplexity for some time. These days, I have claude and chatgpt. They search on my behalf. Sometimes I still do a Google search but I mostly just use it if I want to open a website that I don't remember the url of.
I'd be curious how much Workspace contributes to Google's revenue. I don't see it broken out anywhere in the reporting. Assumedly it's part of the $30.7B cloud revenue.
I was just looking in the Workspace account of a relatively small local business, and realized they're spending ~$6k/yr on Workspace. Multiply that by however other small businesse are on Workspace, add in larger enterprise customers, and you're probably at a decent chunk of revenue.
Title makes it sound like Search shrunk, but it's rather everything else grew drastically, especially Cloud. This diversification is generally a good sign, but investors still seem to panic.
The fact that this was ever more than half should make us extremely suspicious of the whole search engine. Almost all of that money is coming from paid manipulation of search results.
Google has what all its competitors want desperately right now: 2 decades of data. That's their moat and where they will extract the most value as they increasingly lean into AI search results.
OpenAI and Anthropic can catch up, but first they must invent Google search, Google Maps, Gmail, Google Calendar, Youtube and Android.
I checked my Google search history. Compared to pre-AI era, my search volume reduced by 90%+ (from daily 200 searches to like 5). The AI response in the Google Search still has factual errors occasionally.
On the contrary, the ChatGPT has been doing great. The accuracy, recall, precision, or whatever metrics of ChatGPT exceeds Google Search by a large margin.
Ironically, Google is likely more dependent on the success of Anthropic and OAI than they are on the success of Gemini.
They have an all you can eat buffet of cash from those two sitting right in front of them, but they can't build DC's fast enough to capture it. If that buffet dries up, the damage would probably be much worse then Gemini becoming non-competitive.
No they are not, why would you think that, they are bundling Gemini in their suite and millions of professionals use it as it's already part of their Gmail, docs, etc.
Literally all my non tech friends are writing Gemini gems or using notebooklm, with a minority on copilot.
139 comments
[ 0.86 ms ] story [ 23.2 ms ] threadhttps://www.democracynow.org/2026/10/29/sofia_liguori_google...
I think the bigger concern is that earnings misses are very rare for GOOG, and historically they've been able to hit almost any target that Wall Street expects. Their past earnings misses were all related to major macroeconomic events (2020Q1, which was the COVID shutdowns, 2022 all year with inflation from COVID/Ukraine + rate hikes, and 2019Q3 with the taper tantrum from Fed rate hikes), and most of them were more in the 5% range. A 30% miss, particularly with slowing revenue growth in their core business despite almost full monetization of commercial queries, could indicate that the golden goose is disintegrating.
For that matter, GOOG has been extremely correlated with macroeconomic indicators since about 2018, which means investors in the rest of the stock market should probably watch out. It's likely we're already in recession but don't know it.
It's somewhat fake, as fake as last quarter's huge beat. It's basically due to their large share in SpaceX, which they have to mark to market at the end of the quarter. Anyway, that's not at all the reason for the freakout.
So (in theory) advertisers will lower their bids if they're not getting the desired value from the clicks; and over time some will migrate budgets to other channels (like "influencers"? shudder ...).
im very far from dentistry
What they’re doing now is just being a lot more overt about it, because they want to carve up their old cash cow to feed their AI ambitions before ChatGPT and Claude eat it up first.
Course, they win anyway because I also pay for youtube premium to avoid seeing ads..
Feels like the world is becoming a split between people who can afford not to be the product and people who cannot.
Second sentence is empirically a complete lie.
Search volume is still growing, despite analysts asking on every call what Google is going to do about falling volume, and Google continuing to re-iterate: Search volume is still growing, as are clicks on ads.
I get it that everyone hates paying as much for clicks as they do now. You can hate it all you want. You can claim Google is lying about search volume and ads, but that would be massive securities fraud...
Haters gonna hate. It doesn't mean the king is dead.
I'm not a believer in Google search long term, but advertisers continue to pay because they still get value - even if Google increases prices.
For example, non-regulatory attempts at blocking of competitors, which Google does engage in due to their dominant position in mobile (of course, that's also just another better product)
Do they control the default Search engine for Android? For Chrome?
Did they pay to be the default Search engine on iPhone? On Firefox?
Are those rare resources? I'd say yes.
And you're conflating "illegally-maintained Monopoly" with "Monopoly." Whether they got there through using illegal tactics or not is a separate question from whether they are a Monopoly now. 90% - is that a high enough market share to qualify as a monopoly, when their annual revenue is like $224 billion? What percentage would be enough to convince you? Does it need to be 100%?
Not exactly - the consumer stuff (subscriptions and devices) falls under services, while cloud covers GCP, Workspace, and enterprise-specific cloud services (like maps etc).
Basically if you pay for it with a monthly sub on a personal google account (including Gemini stuff like Ai pro) it's services.
[0]https://abc.xyz/investor/faqs-and-general-information/
So if you need tl;dw or something to do with YouTube video, gemini is the most seamless
it grew compared to q3 2025, but it is flat (0% grows) compared to q2 2026.
Search no longer works and you are killing your most important product with AI that nobody wants. If search worked like in 2010, no one would use AI answers.
Search was $63.4B "Everything else" was $64.2B, out of which GCP was $30.7B
Is AI on the 33.5B remaining post GCP? or within the 30.7 of GCP?
And Google knows it, so why not squeeze the current customers, whatever model AI takes it’s unlikely to be a word matching auction, this model is dead, grab the cash and go.
Google didn't exactly leave us much choice to opt out. I have to use a firefox extension to hide that bit.
[citations needed]
Search revenue still grew: the share fell because the rest of Alphabet grew faster.
I have moved to Kagi myself
You cant: 1) win the personal agent (requires a vm for every user) 2) win cloud sales (requires selling your compute) 3) win model war (requires using your compute) 4) win the chip war (requires selling your tpu's themselvs)
Weirdly enough their issue is they're to small to fight every battle, MSFT+Nvidia+Meta+Oai+oracle is like 14T in market cap.
Alphabet Announces Third Quarter 2026 Results [pdf]
https://news.ycombinator.com/item?id=50280197
Found it interesting that I’ve flipped my search tool usage in such a short time. I use models for most “searching” but then utilize Google Search as the last resort.
I wonder if one was actually useful, maybe I’d notice it?
The solution is to force ads upon you and hope that you accidentally click on one due to sensory overload. Or more ads.
Thankfully I never see any ads - ublock origin kills these off. That includes the horrible UI choices Google made on its search interface. A custom ublock origin rule filters away the pointless "others also searched for pink cats" while I was searching for epic skyscrapers. Evidently Google tries to link-lose me here, wasting my time.
The worst part is I've seen search other video sites that used to surface exact titles stop working around the same time. I'm not sure how to reliably find things I know are there anymore.
How is it good news?
Consumer searches for $FOO. $FOO does not show up in the search results.
At this point, the search is useless to users.
Cloud is on pace to be bigger than Search/Ads next year...
Do you really think Search/Ads is going to lose 100% of its revenue by next year to flip that difference?
If they would have stuck to the original white paper and remembered the section on ads, Google Search would still be worth using.
I remember 10 years ago that Google was extremely paranoid about having the whole company propped up on one revenue tent-pole.
Here's a graph with revenue in dollars by segment:
https://www.pasteboard.co/DwvXdQj2LXpk.png
I'm surprised GCP rev is growing so fast. Anecdotally, most devs I know still prefer AWS.
https://www.pasteboard.co/yCGoS8kxEy7Y.png
Google Cloud clearly on positive acceleration for revenue share.
[1]: As the page says,
- "Search" means "ads on Google Search and on other Google properties such as Gmail, Maps and Google Play"
- "Everything else" means "YouTube ads, subscriptions and devices, Google Network and Other Bets".
Why does it even need to keep going up anyway? Is 60 billion not enough?
And it’s not like they can stop the long-term move towards AI from traditional search engines.
All they can do is try to compete with their own AI. Otherwise OpenAI and Anthropic will run away with it.
I used perplexity for some time. These days, I have claude and chatgpt. They search on my behalf. Sometimes I still do a Google search but I mostly just use it if I want to open a website that I don't remember the url of.
But the search revenue is growing at a high speed.
The article wording is just unfortunate.
The non-misleading title would be: "Google Cloud growing way faster than other sources of Alphabet revenue".
I was just looking in the Workspace account of a relatively small local business, and realized they're spending ~$6k/yr on Workspace. Multiply that by however other small businesse are on Workspace, add in larger enterprise customers, and you're probably at a decent chunk of revenue.
OpenAI and Anthropic can catch up, but first they must invent Google search, Google Maps, Gmail, Google Calendar, Youtube and Android.
On the contrary, the ChatGPT has been doing great. The accuracy, recall, precision, or whatever metrics of ChatGPT exceeds Google Search by a large margin.
They have an all you can eat buffet of cash from those two sitting right in front of them, but they can't build DC's fast enough to capture it. If that buffet dries up, the damage would probably be much worse then Gemini becoming non-competitive.
Literally all my non tech friends are writing Gemini gems or using notebooklm, with a minority on copilot.