Alphabet reported Q1 2026 search revenue up 19% to $60.4 billion. Microsoft's Bing hit 1 billion monthly users with search ad revenue up 12%. AI is driving growth, not cannibalising it.
The fear was that AI answers would kill the click. Instead, AI is generating more searches, more engagement and more ad inventory.
Alphabet and Microsoft both reported Q1 2026 earnings last week. The headline: search advertising is growing faster than most analysts expected, and AI is accelerating the trend rather than undermining it.
Google Search and Other revenue hit $60.4 billion, up 19% year over year. Total Alphabet advertising revenue came in at $77.25 billion, a 15.5% increase. Net income jumped 81% to $62.58 billion. Google Cloud revenue rose 63%, beating expectations.
Microsoft reported $82.9 billion in total revenue, up 18%. Bing reached 1 billion monthly active users for the first time. Search ad revenue grew 12%.
Google Search revenue in Q1 2026, up 19% year over year. AI Overviews are driving more queries, not fewer ad clicks.
The numbers challenge the narrative that AI search would cannibalise advertising revenue. Google's AI Overviews are generating more queries, keeping users in the ecosystem longer and creating new ad surfaces. Microsoft's Copilot integration is doing the same for Bing.
Google Network revenue did fall to $6.97 billion, continuing a multi-quarter decline. This means third-party publishers relying on Google ad network placements are still losing ground. The revenue is shifting from the open web into Google's own properties.
Why it matters
For Australian advertisers, these numbers confirm three things. First, Google Search is not dying. It is growing at its fastest rate in years. If your paid search budgets have been flat, you are losing share of voice while competitors spend more.
Second, AI Overviews are not reducing ad effectiveness. Google is monetising AI search results, and advertisers who show up in those surfaces will capture new demand. If you are not optimising for AI-enhanced search placements, start now.
Third, the Google Display Network is shrinking. If a meaningful portion of your budget goes to GDN placements, the inventory quality and reach are declining. Redirect that spend toward Search, Performance Max or direct platform buys.