Why AI is boosting Meta's ad business while hurting Google search
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Meta's advertising business is outpacing Google's search ad growth by the widest margin since 2021, as AI-driven tools boost Meta's ad performance while AI-powered search features threaten Google's core business. Meta's AI recommendations have improved ad targeting and engagement across Facebook and Instagram, helping the company capture more advertising dollars, while Google faces pressure as users increasingly turn to AI chatbots and AI-generated search summaries instead of traditional search queries. The divergence matters because search advertising has long been Google's most profitable franchise, and any sustained slowdown could weigh on parent Alphabet's earnings and valuation. Investors will be watching upcoming quarterly results from both companies for signs of whether Meta's AI ad gains are durable and whether Google can defend its search market share against AI competitors.
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