What Google and Microsoft’s earnings say about search

Alphabet reported first-quarter 2026 earnings, with Google Search & Other revenue rising 19% year-over-year to $60.4 billion. On the same day, Microsoft announced that Bing reached one billion monthly active users for the first time and search ad revenue increased 12%.

Both companies had strong search quarters. But one line in Alphabet’s report tells a different story for the websites that rely on Google’s advertising network for revenue.

Google network revenue fell below $7 billion

The “Network” segment, including AdSense, AdMob and Google Ad Manager, is not an indicator of the entire advertising industry on the Internet, but a clear financial indicator of ads outside of Google’s interfaces. For publishers and app developers who rely on Google-powered ads, the decline affects them more than the growth in search revenue.

It has shrunk over two years, with Google’s network declining quarterly from the first quarter of 2024 to the first quarter of 2026. The $6.97 billion in the first quarter of 2026 is the lowest and is below $7 billion for the first time.

The gap is becoming increasingly clear. In the first quarter of 2024, the Google Network accounted for approximately 12% of Google’s advertising revenue; by the first quarter of 2026 it fell to around 9%. Meanwhile, Google Search & Other grew from $46.2 billion to $60.4 billion, with Search up 31% and Others down 6%.

The decline does not reflect the overall digital advertising market. The IAB/PwC Internet Advertising Revenue Report found that U.S. programmatic advertising grew 20.5% to $162.4 billion in 2025. The programmatic market grew while Alphabet’s Google network line did not.

The quarterly figures smooth out major disruptions at the publishing level. In January, a two-day technical glitch in Google’s ad exchange caused AdSense publishers to report eCPM and RPM drops of 50-90% without a corresponding drop in traffic. Google solved the problem, but it showed how fragile network monetization on the publisher side can be.

Bing’s milestone in context

While Google’s revenue mix suggests its ecosystem is shifting inward, Microsoft is betting big on user acquisition to prove its AI bets are paying off.

CEO Satya Nadella announced during the third quarter 2026 earnings conference call that Bing reached one billion monthly active users for the first time. Search ad revenue (excluding traffic acquisition costs) increased 12%. Edge has gained browser market share for 20 consecutive quarters.

The broader segment, which includes Bing, fell 1% overall to $13.2 billion. The bright spot in this was search engine advertising.

Bing’s global search share is still around 5% worldwide, according to March 2026 StatCounter data. This gap between 1 billion MAU and about 5% global share raises questions about what the MAU number measures. Microsoft has not defined the frequency, overlap, or how AI-related Bing usage will be counted.

Microsoft also develops measurement tools that are important for SEOs. Bing Webmaster Tools now matches well-founded queries to cited pages, and Microsoft previewed Citation Share at SEO Week in April. When Citation Share launches, it could become one of the first tools provided by the platform to compare AI visibility on Bing to its competitors.

CFO Amy Hood reported high-single-digit search ad growth in the fourth quarter, up from three double-digit quarters. Nadella said the consumer business is doing “the essential work needed to win back fans.” Bing’s results help maintain coverage without abandoning the Google-first focus.

Why this matters for search professionals

For over a year, SEO experts have been monitoring whether AI overviews and AI mode reduce clicks on publisher websites. These reports do not resolve this question, but rather support a pattern documented by independent research.

Google’s search business is growing, with CEO Sundar Pichai calling searches “at an all-time high.” Chief Business Officer Philipp Schindler attributed the quarter’s strength to retail, finance and healthcare.

What is controversial is what happens after the query. Google network revenue fell while search revenue increased, suggesting more searches remain on Google surfaces. The data does not prove that AI overviews or AI mode caused the network’s decline. Google’s network may decline for a variety of reasons, including ad demand and product changes. This gives search marketers another financial signal to compare to traffic, CTR and publisher revenue.

Third-party data partially closes the gap, although studies measure different things. An Ahrefs study analyzed 300,000 keywords using desktop CTR data and found that AI overviews correlated with 58% lower click-through rates. Chartbeat data shared by Axios showed that small publishers lost 60% of search traffic in two years, medium publishers lost 47%, and large publishers lost 22%.

Seer Interactive saw an organic CTR decrease from 1.41% to 0.64% for searches with AI overviews. The April update showed some recovery. Organic CTR on AI overview queries increased from 1.3% in December to 2.4% in February. The worst of the initial decline may have subsided, but the click-through rate is still well below that of sites without AI overviews.

Google’s Liz Reid on Bloomberg claims that AI overviews reduce “bounce clicks” rather than useful visits, but provides no supporting data. She said they track search repeat, which measures Google engagement rather than publisher traffic. Google executives made a similar argument on Google Marketing Live, describing clicks from AI-powered search as “higher qualified” without revealing any supporting data.

According to the metrics disclosed, search activity continues to increase. However, 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 increase even as publisher traffic declines.

What neither company has disclosed

Neither company disclosed how much AI-powered query growth drives outbound clicks on publisher sites; This number has been missing from earnings reports since AI features were introduced in search.

Pichai said searches are “at an all-time high,” referring to searches, not clicks on external sites. Microsoft didn’t clarify what counts toward Bing’s 1 billion MAU, including whether it includes Copilot interactions, API calls, or agent queries.

Looking ahead

Pichai said more search information will be shared at Google I/O in May and at Google Marketing Live.

Microsoft’s Citation Share hasn’t shipped yet; Once it does, it could be one of the first platform tools for comparing AI visibility on Bing. Its usefulness depends on whether Microsoft discloses data on outbound clicks alongside its MAU numbers.

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