Meta’s ads grew 26% while Google Search grew 12%, the widest gap since 2021

Meta’s advertising revenue rose 26% to $63.1 billion in the third quarter, while Google’s Search business grew 12% to $63.4 billion. CNBC calculated that this 14-point gap is the widest in Meta’s favor since 2021. The company filings behind those numbers show what drove each side.

The filings put both ad lines at almost the same size

Meta’s 10-Q lists advertising revenue of about $63.06 billion for the quarter ended September 30, up 26% from a year earlier. Total revenue was $64.6 billion. According to the filing, ad impressions rose 10% and the average price per ad rose 14%, so the growth came from both more ads shown and higher prices for each one.

Alphabet’s earnings release lists Google Search and other at $63,350 million, up from $56,567 million a year earlier. Alphabet says Search grew 12% and that Google Services revenue rose 11% to $96.3 billion. Alphabet also says query growth was the highest in five years. CNBC reports that Google’s YouTube added a further $11 billion in the quarter.

Google as a whole is growing faster than its Search line suggests. Consolidated revenue rose 25% to $127.6 billion, and Google Cloud revenue grew 103% to $30.7 billion. Meta, by CNBC’s account, still depends on ads for 98% of its sales, while ads are now under two-thirds of Alphabet’s revenue.

Meta credits AI tools inside Ads Manager

CNBC reports that, on Meta’s earnings call, CFO Susan Li said advertisers who adopted the recommendations of its Meta AI business assistant “drove almost 5% more conversions” and raised their ad spending by 9% compared with similar advertisers who did not. She said almost 10 million advertisers used at least one Meta AI tool in the quarter. Those are Meta’s own figures. Neither the filing nor the call gives a dollar value for how much of the 26% growth came from AI.

Google says it is putting its Gemini models across its ads systems. According to CNBC, Philipp Schindler, Google’s chief business officer, described this as deploying them “across our entire ads infrastructure”. CNBC’s reading is that Google has a similar opening in AI ad tools, but that its search product also competes directly with chatbots such as ChatGPT and Claude.

What the numbers cannot yet show

The figures prove a growth gap. They do not prove its cause. CNBC attributes the gap to AI helping Meta’s targeting and to chatbots drawing people away from search results pages. Alphabet’s own report points the other way on usage, since queries hit a multi-year high. The slowdown is in revenue growth, not in searching.

The analyst warnings are forecasts, not results. Nate Elliott of Emarketer told CNBC that if chatbots get better at helping people find things, search habits “might change for the first time in a generation”, which he called “potentially catastrophic for Google’s ad business”. UBS analysts wrote that the quarter brings search cannibalization fears “right back to the forefront”, according to CNBC. Wedbush analysts, also quoted by CNBC, said Google shares are unlikely to work until the search narrative changes.

Spending adds to the uncertainty. Meta’s quarterly capital expenditure was $34.91 billion, and free cash flow was negative $2.12 billion, according to coverage of its filing. Meta guides to $73 billion to $76 billion of revenue for the fourth quarter. CNBC says Google projects up to $205 billion of capital spending this year and Meta up to $145 billion, and that both have been pushed into negative free cash flow. We covered the same pressure at Amazon, and Meta’s AI push includes a $3 billion Nvidia investment tied to its Muse agent work.

Meta’s quarter also carried a roughly $9.9 billion charge linked to an August multistate attorneys general agreement, which cut reported operating income by 37% to $12.99 billion, according to coverage of the 10-Q. Excluding it, operating income rose 11%. The ad growth comparison is therefore not distorted by that charge, but profit comparisons between the two companies should account for it.

The next test is whether Google’s AI ad tools lift Search revenue growth back toward Meta’s pace, and whether Meta’s spending turns into revenue beyond ads. Neither company’s filings answer that yet.