Google and Microsoft Earnings Hint at Search Trends

Alphabet reported its Q1 2026 earnings, with Google Search & Other revenue climbing 19% year over year to $60.4 billion. On the same day, Microsoft announced that Bing had reached 1 billion monthly active users for the first time, with search ad revenue up 12%. Both tech giants posted strong quarters for their core search businesses, but a closer look at Alphabet’s financials reveals a more complicated picture for the websites that depend on Google’s ad network.

Google Network Revenue has slipped below the $7 billion threshold for the first time, landing at $6.97 billion in Q1 2026. This segment, which includes AdSense, AdMob, and Google Ad Manager, has been declining each quarter for over two years. While it is not a perfect proxy for the entire web’s ad economy, it is a clear financial indicator for ads placed outside Google’s own properties. For publishers and app developers relying on Google-brokered ads, this decline has a direct impact that Search revenue growth cannot offset.

The gap between these two revenue streams is widening. In Q1 2024, Google Network accounted for roughly 12% of Google’s total ad revenue; by Q1 2026, that share had fallen to about 9%. Meanwhile, Google Search & Other revenue expanded from $46.2 billion to $60.4 billion, a 31% increase, while the Network segment contracted by 6%. This divergence does not align with the broader digital ad market. According to the IAB/PwC Internet Advertising Revenue Report, U. S. programmatic advertising grew 20.5% in 2025, reaching $162.4 billion. The programmatic market expanded, but Alphabet’s Google Network line did not.

The quarterly figures smooth over more severe disruptions at the publisher level. In January, a two-day technical failure in Google’s ad exchange caused AdSense publishers to report eCPM and RPM drops of 50-90%, even though traffic remained steady. Google eventually resolved the issue, but the incident underscored how fragile publisher-side network monetization can be.

While Google’s revenue mix points to an ecosystem shifting inward, Microsoft is leaning heavily into user acquisition to demonstrate that its AI investments are paying off. CEO Satya Nadella revealed during the FY26 Q3 earnings call that Bing had reached 1 billion monthly active users for the first time. Search ad revenue, excluding traffic acquisition costs, grew 12%, and Edge has gained browser market share for 20 consecutive quarters. The broader segment, which includes Bing, was down 1% overall to $13.2 billion, but search advertising was the bright spot within it.

Despite this milestone, Bing’s global search share remains at about 5% worldwide, according to StatCounter’s March 2026 data. The gap between 1 billion MAU and roughly 5% global share raises questions about what the MAU figure actually measures. Microsoft has not defined frequency, overlap, or how AI-related Bing usage is counted. The company is also building measurement tools that matter for SEOs. Bing Webmaster Tools now maps grounding queries to cited pages, and Microsoft previewed Citation Share at SEO Week in April. When Citation Share ships, it could become one of the first platform-provided tools for comparing AI visibility on Bing against competitors.

CFO Amy Hood reported Q4 search ad growth in the high single digits, down from three consecutive double-digit quarters. Nadella said the consumer business is doing “the foundational work required to win back fans.” Bing’s results support maintaining coverage, not dropping a Google-first focus.

For search professionals, these reports do not settle the question of whether AI Overviews and AI Mode are decreasing clicks to publisher sites, but they do support a pattern documented by independent research. Google’s Search business is growing, with CEO Sundar Pichai calling queries “at an all-time high.” Chief Business Officer Philipp Schindler attributed the quarter’s strength to retail, finance, and health. What is contested is what happens after the query. Google Network revenue fell while Search revenue accelerated, suggesting that more searches are staying on Google surfaces. The data does not prove that AI Overviews or AI Mode caused the Network decline. Google Network can decline for various reasons, such as ad demand and product changes, providing search marketers with another financial signal to compare with traffic, CTR, and publisher revenue.

Third-party data partially fills the gap, though studies measure different things. An Ahrefs study analyzed 300,000 keywords using desktop CTR data and found that AI Overviews correlate with 58% lower click-through rates. Chartbeat data shared by Axios showed that small publishers lost 60% of search traffic over two years, medium publishers 47%, and large publishers 22%. Seer Interactive tracked an organic CTR drop from 1.41% to 0.64% for queries with AI Overviews. Its April update showed some recovery, with organic CTR on AI Overview queries climbing from 1.3% in December to 2.4% in February. The worst of the initial drop may have eased, but CTR is still well below that of pages without AI Overviews.

Google’s Liz Reid claimed on Bloomberg that AI Overviews reduce “bounce clicks” rather than useful visits, but she did not provide supporting data. She said the company tracks search recurrence, which measures Google’s retention rather than publisher traffic. Google executives made a similar argument at Google Marketing Live, calling clicks from AI-enhanced search “more highly qualified” without sharing supporting data.

Search activity continues to grow according to disclosed metrics, but the value capture is shifting. Metrics like referral traffic, AdSense RPM, or organic CTR may no longer align with search revenue growth. Google’s revenue can rise even as publisher traffic declines.

Neither company disclosed how much AI-assisted query growth produces outbound clicks to publisher sites. That number has been absent from earnings reports since AI features launched in Search. Pichai said queries are “at an all-time high,” referring to searches, not clicks to external sites. Microsoft has not clarified what counts toward Bing’s 1 billion MAU, including whether Copilot interactions, API calls, or agent queries are included.

Looking ahead, Pichai said more Search information will be shared at Google I/O in May and Google Marketing Live. Microsoft’s Citation Share has not shipped yet; once it does, it could be among the first platform tools for comparing AI visibility on Bing. Its usefulness depends on whether Microsoft discloses outbound click data alongside its MAU figures.