#search-advertising

#search-advertising

Revenue was $81.3 billion and increased 17% (up 15% in constant currency) Operating income was $38.3 billion and increased 21% (up 19% in constant currency) Net income on a GAAP basis was $38.5 billion and increased 60%, and on a non-GAAP basis was $30.9 billion and increased 23% (up 21% in constant currency) Diluted earnings per share on a GAAP basis was $5.16 and increased 60%, and on a non-GAAP basis was $4.14 and increased 24% (up 21% in constant currency) Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below

Right now, Google's revenue stream comes from advertising via its search monopoly. Search queries are cheap, and the ads Google sells are pricey due to its market power, so it's a very profitable business. Gemini, by contrast, is expensive to operate and generates no revenue. Even if Google were able to shift all of its search advertising revenue to Gemini, it would be moving from an extremely high-margin business to a lower-margin one. So what's actually going on?

Chrome, Google's browser, commands roughly 68% of the global market share. That's a staggering lead, with Apple's Safari trailing far behind at under 14%. No other competitor even registers in the double digits. For years, this synergy between search and browsing has created an unbreakable ecosystem, where users default to Google tools for convenience and familiarity. But the rise of artificial intelligence could upend this empire. AI isn't just a buzzword; it's reshaping how people interact with the internet.

From activities to cultural interactions, now more than ever, travelers want experiences, and GenAI is playing a pivotal role in helping them book trips that will meet or even exceed their expectations. A 2025 Phocuswright survey found that 78% of respondents felt GenAI improved trip planning, and Google is now incorporating AI-generated content into its search results. Now, instead of spending hours meticulously researching potential destinations, hotels and activities, travelers are getting AI recommendations, ideas and even full-blown itineraries with just a few prompts.

TikTok has shared some new data on the potential of its Search Ads, which place brand results into relevant search queries within the app. TikTok added Search Ads back in 2023, which, as noted, will display your ads within related search queries in the app. And with TikTok users conducting billions of searches in the app every day (TikTok says that total searches are up 40% year over year),

Other conduct rules that the CMA is considering include requirements in how it ranks its search results and for Google's distribution partners such as Apple to offer 'choice screens' to help consumers switch more easily between search providers.