Search volatility intensified during the first week of February 2026 as Google deployed a Discover-specific update prioritizing local content, while OpenAI began accepting advertisers for ChatGPT placements at premium rates exceeding typical social media inventory.
Alphabet reported fourth quarter 2025 revenues of $113.8 billion on February 4, representing an 18% year-over-year increase, as the company disclosed that its Gemini App has grown to 750 million monthly active users. The Mountain View-based technology company's advertising business generated $81.5 billion during the quarter, growing 14% from $71.5 billion in the prior year period.
Net income reached $35.0 billion for Q4 2025, increasing 33% from the prior year period. Diluted earnings per share grew 35% to $2.87, reflecting both revenue growth and operating leverage improvements across the business. The earnings growth exceeded revenue growth, demonstrating improving profitability as the company scales its operations. Full year 2025 revenues exceeded $400 billion for the first time in company history, reaching $402.8 billion.
The company announced capital expenditure investments between $175 billion and $185 billion for 2026 to support AI infrastructure development. Previous capital expenditure levels had already increased substantially throughout 2025. The company invested $91.4 billion in purchases of property and equipment during the trailing twelve months ending Q4 2025, according to the cash flow reconciliation in the earnings release. The 2026 guidance represents approximately doubling of infrastructure investment compared to 2025 levels.
Geographic performance showed strong growth across all regions. United States generated $55.4 billion with 17% growth, EMEA contributed $33.1 billion with 17% constant currency growth, Asia-Pacific reached $18.5 billion with 22% growth, and Other Americas generated $6.9 billion with 20% growth during Q4 2025. The infrastructure spending includes investments in NVIDIA's Blackwell GPUs and future Vera Rubin GPUs. Google maintains its position as the first cloud provider to offer these advanced AI training chips.
Google Cloud reached $17.6 billion during the quarter, representing 34% year-over-year growth and continuing momentum from throughout 2025. The cloud division has consistently delivered quarterly growth above 30% throughout the year, with Q3 2025 achieving $15.2 billion and Q2 2025 reaching $14.1 billion. Cloud backlog surged 46% quarter-over-quarter to $155 billion in Q3, indicating substantial contracted future revenue extending into 2026 and beyond.
YouTube advertising revenues reached $34.2 billion for full year 2025, though the company did not break out Q4 2025 specific figures in the earnings release. The video platform continues expanding its connected television presence, with YouTube Shorts surpassing traditional in-stream revenue per watch hour in the United States during Q3 2025 according to previous earnings disclosures.
However, Google Network revenues declined during Q4 2025, continuing a pattern established throughout the year. Network advertising revenue fell 1% year-over-year to $7.4 billion during Q2 2025, marking concerning trends for publishers as artificial intelligence features increasingly answer user queries without directing traffic to external websites. The Google Network, which includes AdSense, AdMob, and Google Ad Manager, traditionally served as a crucial revenue source for millions of websites worldwide.
Google released the February 2026 Discover core update on February 5, targeting exclusively English language users in the United States. The algorithmic adjustment prioritizes domestically-based websites while reducing sensational content and elevating topic-specific expertise. The company stated the update will roll out over two weeks for the initial market before expanding to all countries and languages, though no specific timeline exists for global deployment completion.
Vic Daniels, Co-founder and Executive Chairman at GRV Media Ltd, published LinkedIn analysis on February 6 characterizing the geographic filtering as "The Invisible Border" that contradicts fundamental principles of the open web. The update disadvantages international publishers serving U.S. audiences regardless of content quality or expertise. A British publication covering American politics must navigate geographic deprioritization alongside undefined clickbait standards and undocumented expertise assessment criteria.
Tim Cowen, Chair of Antitrust Practice at Preiskel & Co LLP, noted European Union authorities may scrutinize the update's impact on cross-border information flows and competitive dynamics within the single market. Platform consolidation intensifies these concerns. Research published by Cloudflare in January 2026 demonstrated that Googlebot accesses 3.2 times more unique URLs than OpenAI and 4.8 times more than Microsoft. This crawler dominance provides Google with superior data for training AI systems while geographic filtering creates compounding effects reinforcing control over information distribution.
The update operates alongside two other major changes: clickbait reduction and topic-specific expertise evaluation. These three components create complex pressures shaping publisher editorial decisions. Documentation posted by Google indicates the changes will "improve Discover" by showing users more locally relevant content from websites based in their country, reducing sensational content and clickbait, and showing more in-depth, original, and timely content from websites with expertise in given areas based on system understanding of site content.
Google search algorithm experienced extreme fluctuations beginning February 2, with tracking tools registering unprecedented volatility levels unrelated to the Discover update. SEMrush sensors recorded volatility scores exceeding 9.0 on a 10-point scale, while Mozcast temperatures reached levels not observed since the November 2023 core update rollout.
The turbulence continued through February 5 when site owners reported newly published content failing to appear in search results for 12 to 18 hours, significantly longer than typical indexing windows of two to four hours. The delays affected sites across multiple hosting providers and content management systems, suggesting infrastructure-level complications rather than isolated technical problems. Technical analysis revealed sites using JavaScript frameworks reported particularly severe delays, with some pages remaining unindexed for more than 24 hours after publication.
Google acknowledged issues on February 5 but provided no resolution timeline, stating only that engineers were "investigating the matter." The company has not commented on the unconfirmed ranking updates despite widespread reporting across industry forums. Glenn Gabe noted via X that tracking suggests a reviews update may have rolled out, though Google stopped announcing reviews updates after the system became continuous.
Previous algorithm updates typically rolled out independently of infrastructure changes, allowing site owners to distinguish between ranking shifts caused by content quality signals versus technical problems. The convergence of multiple system changes during the same week complicated diagnosis and recovery efforts for affected properties. The December 2025 core update kicked off on December 11 at approximately 12:25 pm ET and ended on December 29 at approximately 2:05 pm ET, featuring two spikes on December 13 and December 20.
OpenAI began accepting advertisers for ChatGPT advertising placements starting February 6, according to advertising executives who have spoken to the company. The test period lasting several weeks offers sponsored placements at the bottom of answers on free and Go tiers of ChatGPT at $60 per 1,000 views. That rate compares to targeted streaming and premium television inventory like NFL games, well above Meta's typical CPMs often under $20.
The company approached brands directly rather than working through agencies. More than 23 agencies contacted by Digiday stated what they knew about the advertising business came via leaks, gossip, or reporting rather than OpenAI communications. The few aware of the pitch said they heard it from clients. Adthena CEO Phillip Thume noted the caliber of brands targeted: "The only clients we've heard that have been approached are the biggest of the big." Adthena's 400-strong client roster includes household names such as The Home Depot, Dell, and Inspire Brands.
Advertisers will receive view and click-through metrics according to documents OpenAI shared with advertisers that Digiday reviewed. Beyond that, key details remain murky including where ads appear, the context surrounding them, which prompts trigger them, what tracking information might be available, what future metrics OpenAI will provide, or any indication of long-term measurement capabilities. The limited performance data stands in contrast to the premium pricing comparable to highly targeted television inventory.
The advertising push started last month after OpenAI confirmed advertising tests on January 16, 2026. The formal announcement established a baseline CPM of approximately $60. The broader timeline includes OpenAI's September 24, 2025 job posting for advertising infrastructure development, followed by a December 2, 2025 internal directive delaying ad implementation before the January 16 formal announcement.
Industry analyst Debra Aho Williamson predicted in December 2025 that ChatGPT would reach 1 billion weekly users by the end of 2025 and begin displaying advertisements in 2026. She expects new ad formats to launch on AI-driven platforms including Google AI Overviews/AI Mode, Microsoft Copilot, and Amazon's Rufus, effectively turning AI chats into new media channels for advertisers seeking purchase-oriented conversation placements.
Anthropic announced on February 4 that Claude will remain advertisement-free across all subscription tiers, establishing principles that prohibit sponsored content from influencing responses or appearing adjacent to conversations. The company created four commercials with advertising agency Mother and director Jeff Low, with two commercials airing during Super Bowl coverage on February 8 before kickoff and during the first quarter.
The commitment applies globally to all Claude users regardless of geographic location or subscription tier. The Super Bowl commercials broadcast during February 8 game coverage in the United States, with additional distribution planned for international markets in weeks following the game. The competitive positioning directly targets OpenAI's ChatGPT advertising strategy, which initially launches for logged-in adults in the United States.
The timing capitalizes on competitive dynamics as OpenAI faces criticism for introducing advertising into ChatGPT after previously positioning subscriptions as its monetization strategy. CEO Sam Altman characterized ads as a "last resort" in November 2025 before announcing commercial placements in January 2026. The strategic shift creates perception challenges that Anthropic exploits through its "never ads" commitment.
The aggressive consumer marketing approach represents a shift for a company primarily focused on enterprise sales and developer adoption. Anthropic historically emphasized technical capabilities, safety features, and enterprise security rather than mass-market brand awareness. The Super Bowl investment indicates strategic prioritization of consumer brand recognition alongside existing enterprise positioning. The company simultaneously announced a Formula 1 sponsorship deal positioning Claude branding on racing vehicles and team equipment throughout the motorsport season.
Reddit reported on February 5 $690 million in ad revenue for Q4 2025, a 75% year-over-year increase. The company's ad business grew by at least 60% each quarter of 2025. Reddit saw active advertiser count grow by 75% year-over-year in Q4. The company reported $2.1 billion in total 2025 ad revenue, topping $2 billion in annual ad revenue for the first time and improving on 2024 revenue by 74%.
Despite these gains, the company's stock declined 38% over the past month. Reddit's strong Q4 revenue performance resulted in only a modest 5% rebound in share price during after-hours trading on Thursday. The decline could relate to recent insider selling or analyst concerns about small and midsize advertisers. Reddit's closest social media peers, Snap and Pinterest, saw their stocks drop by 38% and 27%, respectively, in the past 30 days.
These platforms may be wrapped up in an overall downturn affecting the tech sector. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all dropped by more than 1% on Thursday. Digiday research published January 7 highlighted Reddit as a platform combining search and social opportunity. M7 Innovations' Maher pointed to Reddit as having a mature ad ecosystem with 22 billion human-created posts used as authority in large language models. Posts that are six, 12, or 18 months old still get sourced first within AI search engines, with Reddit continuing to rank number one or in the top three of sources cited in large language search.
The IAB State of Data 2026: The AI-Powered Measurement Transformation report released February 7 reveals that up to 75% of marketers say attribution, incrementality tests, and marketing mix models underperform on rigor, timeliness, trust, and actionability. The research surveyed more than 400 senior planning and analytics decision-makers at U.S. brands and agencies. The study was conducted in partnership with BWG Global and sponsored by Dstillery and OptiMine.
Half of marketers have already moved AI into scale and live production for measurement tasks despite ongoing concerns about legal compliance and accuracy. The research identifies up to $32 billion in value at stake as marketers navigate the transition from traditional measurement approaches to AI-powered systems. Marketing budgets are shrinking as a share of company spending according to Gartner's 2025 CMO Spend Survey referenced in the report, creating less room for inefficiency and intensifying demands that measurement provide timely, credible insights to justify spend and guide optimization.
Privacy regulations, platform changes, and fragmented data environments have scattered measurement signals across disconnected systems, preventing consistent cross-channel measurement while making it difficult to tie exposure to actual results. TransUnion research released October 21, 2025 found marketing measurement confidence has plateaued, with 54.1% of marketers reporting no change in confidence year-over-year and 14.3% saying it declined, while internal stakeholders question metrics in 60.2% of organizations.
The IAB report arrives as marketers confront fundamental shifts in how consumers discover and engage with brands through AI-powered interfaces. In a December 2024 survey of 1,100 consumers conducted by Bain and Dynata cited in Digiday research, 80% of users said they relied on AI summaries at least 40% of the time, leading to an estimated organic traffic decrease between 15% and 25%. A 2025 eMarketer report estimated that AI search agents could cause a 38% drop in ad exposure during discovery, 47% during consideration, and 30% at conversion.
Scope3 confirmed last week it reduced engineering and sales staff five months after previous layoffs as the company pursues transformation to agentic advertising infrastructure. The sustainability-focused adtech company declined to specify how many positions were eliminated in February 2026. One impacted employee told Adweek they learned about losing their job during a brief call with their manager last week. Two former employees speaking anonymously said several colleagues recently departed voluntarily as well.
The workforce reductions arrive as Scope3 pursues fundamental transformation from carbon emissions measurement to what CEO Brian O'Kelley calls "agentic advertising." The company launched this strategic direction in March 2025 with its Agentic Media Platform, described as an adaptable operating system enabling organizations to build, integrate, or deploy agents that execute autonomous decisions at the impression level.
Tim Collier, who became chief commercial officer in August 2025 during the first round of layoffs, explained the challenge: "As we think about building and owning the agentic advertising category, it requires us to totally rethink how we set up the commercial structure of the business. This isn't about taking a ton of programmatic players and putting an AI on top of it. That doesn't work." The February layoffs affecting both commercial and engineering teams suggest market demand for agentic advertising infrastructure may not be developing as quickly as anticipated, or that operational efficiency requires more aggressive cost management than previously recognized.
The challenge extends beyond operational execution to fundamental questions about whether advertisers will adopt probabilistic agentic AI systems over deterministic programmatic infrastructure. Traditional programmatic advertising operates on deterministic principles where inputs produce predictable, repeatable outputs. Agentic AI introduces probabilistic decision-making where identical inputs can generate different outcomes based on model interpretation. The advertising industry has spent two decades building trust in deterministic systems that provide clear audit trails and consistent behavior. Whether buyers will embrace the uncertainty inherent in AI agents remains to be seen, particularly for advertisers requiring strict brand safety controls and regulatory compliance.
As of late 2024, Scope3 employed over 100 people globally according to a blog post by O'Kelley. That figure predates both the August 2025 and February 2026 layoffs, making current staffing levels unclear. The August layoffs primarily affected the commercial team responsible for generating revenue, while the company continued hiring in product and engineering departments deemed critical for scaling AI offerings. The latest cuts affecting both engineering and sales teams suggest more comprehensive cost management than the August restructuring.
The Interactive Advertising Bureau projects that 66% of advertisers now prioritize agentic AI for campaign execution, according to research released January 28, 2026. Despite strong industry interest, the shift requires fundamental restructuring of how companies serve clients. Scope3 operates at the intersection of sustainability measurement and brand safety verification, attempting to establish leadership in agentic advertising while competing against larger verification providers and platform-native AI tools.
The restructuring reflects broader industry challenges as companies navigate transitions from traditional programmatic workflows to AI-powered systems. Pinterest cut 780 jobs on January 27, 2026, approximately 15% of its workforce, while emphasizing strategic resource reallocation toward artificial intelligence rather than financial distress. Shares tumbled nearly 10% following the announcement. According to data tracked by Layoffs.fyi cited in Reuters reporting, more than 123,000 employees were laid off from 269 technology companies in 2025.
Microsoft announced in May 2025 to discontinue Microsoft Invest (formerly Xandr) effective February 28, 2026, explicitly citing incompatibility between traditional DSP models and visions for conversational advertising experiences. The pattern suggests industry-wide challenges as business models shift to accommodate AI-powered automation.
CloudX launched into general availability on February 4 after beta testing during most of Q4 with a small group of mobile publishers. The startup co-founded by MoPub and MAX co-founders uses large language model agents, intelligent monetization, and trusted execution environments to automate tedious busywork that usually falls to engineers and ad operations teams.
CloudX CEO and Co-Founder Jim Payne explained the value proposition: "There's a limit to what a single ad monetization person can do, just from a tactical perspective." The platform aims to make the mobile ad stack behave more like programmable infrastructure rather than another AI-powered supply-side platform. The service automates the grunt work of setting up and maintaining stacks, allowing publishers to focus on strategic decisions rather than technical implementation.
The launch reflects broader industry movement toward agentic advertising systems. PubMatic launched AgenticOS on January 5, 2026 with live campaigns. Yahoo DSP launched agentic AI capabilities on January 6. Scope3 serves as the first buyer participant in Swivel's agentic transactions that launched November 4, 2025. The Ad Context Protocol launched October 15, 2025 with Scope3 as a founding member. Magnite tested seller agent capabilities with Scope3 as buyer agent in December 2025.
Roblox Corporation positioned its advertising platform for significant expansion after mandatory age verification data revealed 27% of verified users are over 18, according to the company's Q4 2025 shareholder letter released February 5. The demographic disclosure fundamentally changes advertiser understanding of the platform's audience composition, with implications for brands seeking verified adult audiences at scale.
The company's rewarded video advertising format achieved completion rates exceeding 90% and viewability rates of 95% across over 1,000 brands during the quarter. Roblox made the product broadly available following extensive beta testing that verified consistent performance across iOS and Android devices, including low-memory specifications. The mandatory age verification rollout began in Australia, New Zealand, and the Netherlands before expanding globally, completing in early January 2026.
Through January 31, 2026, 45% of daily active users had completed age verification. The platform operates worldwide with particularly strong growth in Asia-Pacific markets. Daily active users outside the United States and Canada grew 79% year-over-year. The company reported 63% year-over-year bookings growth to $2.2 billion and 69% daily active user growth to 144 million in Q4 2025.
Infrastructure and trust and safety expenses grew to $209 million in Q4 2025, 65% higher than Q4 2024, primarily driven by third-party cloud infrastructure expenses supporting increased traffic and engagement. In 2026, the company will continue migrating AI inference workloads from third-party cloud providers to its own GPU-equipped data centers. The company began targeted infrastructure investments during the fourth quarter achieving a 10x efficiency improvement for certain AI workloads related to safety moderation, discovery, and content generation.
The first month of 2026 saw all three cable news networks start with positive momentum compared to December 2025. Gains were recorded by all news networks in total viewers and the Adults 25-54 demo during primetime and total day. This resulted from an active news cycle in January, which began with military action in Venezuela and continued with ongoing unrest in Minnesota stemming from ICE's presence and cold winter weather.
Fox News in January had 2.046 million total viewers in primetime and 197,000 viewers in the Adults 25-54 demo according to Nielsen big data plus panel. During total day, it had 1.442 million total viewers and 142,000 viewers in the demo. Compared to December 2025 performance, Fox News grew by 11% in total viewers and 24% in the A25-54 demo during primetime viewing hours. The Five was the most-watched program in total viewers with 3.732 million at 5 p.m. ET. The Five was also on top in the advertiser-coveted A25-54 demo with 328,000 viewers.
CNN during primetime in January had 660,000 total viewers and 135,000 A25-54 viewers. When looking at total day, the network had 508,000 total viewers and 96,000 demo viewers. Compared to the previous month, CNN was up 35% in total viewers and 96% in the demo during primetime. It also grew by 29% in total viewers and 81% in the demo during total day. MS NOW compared to December was up 1% in total viewers and 6% in A25-54 during primetime. During total day, it grew by 4% in total viewers and 17% in the demo.
NewsNation's primetime lineup was up 13% among Adults 25-54 in January 2026 compared to January 2025. Newsmax's Rob Schmitt Tonight was the network's top show in total viewers and the demo with 345,000 and 28,000 viewers, respectively. The ratings demonstrate how political and breaking news cycles drive viewership to traditional cable news programming despite ongoing industry discussions about cord-cutting and streaming alternatives.
Super Bowl advertising pricing reached $10 million for a 30-second ad in 2026, and NBC sold out five months early—the fastest sellout in Super Bowl history. In 1967, a Super Bowl commercial cost $42,500. Adjusted for inflation, that would be approximately $383,000 today. Prices have doubled in the past decade alone. This represents a market exceeding pace with the economy.
VaynerMedia's Gary Vaynerchuk, who frequently criticizes television advertising as overpriced, admits that Super Bowl advertising represents "the best deal in marketing. Like, not even close... a steal." System1 surveyed 60,000 consumersasking them to look back on all 425 ads from the last five years of Super Bowls to gauge which ones had the strongest potential for long-term growth. Jon Evans, chief customer officer at behavioral science research firm System1, noted "the average Super Bowl ad on our five-star scale is actually only three stars."
Health themes emerged among food and beverage brands announcing Big Game ad buys. Instead of advertising sugary soda, PepsiCo will front prebiotic soda brand Poppi, which returns to the game to tout "healthy bacteria in your gut." The shift reflects broader consumer trends toward wellness-focused products. Super Bowl 59 became the most-watched Super Bowl ever, creating unprecedented demand from advertisers for the upcoming Big Game set to air on February 8, 2026. Puerto Rican music phenomenon Bad Bunny will perform during the halftime show.
Disney, which typically promotes its Marvel films during the Super Bowl, is making the MCU sit this one out. The studio has Avengers: Doomsday scheduled for December 18 and Spider-Man: Brand New Day premiering July 31 in 2026. Disney is expected to put its weight behind The Mandalorian and Grogu releasing May 22, Hoppers scheduled for March 6, and possibly Toy Story 5 premiering June 19 for Super Bowl 60.
Paramount recently kicked off this year's Super Bowl movie spots, debuting its new trailer for the upcoming horror film Scream 7. Super Bowl 60 movie advertisers include several usual suspects, with Disney and Universal debuting multiple trailers. The strategic shift away from Marvel content during the Big Game represents a notable change in Disney's traditional approach to leveraging the massive Super Bowl audience for franchise promotion.
Connected television performance metrics continue facing scrutiny as industry terminology evolves. Erez Levin, Principal at an advertising firm, noted on February 5 that "Performance CTV" has emerged as convenient shorthand that oversimplifies how television actually drives value. Television has always performed, including in driving short-term impact especially from people already in market. The focus on performance guarantees that campaign results will be misinterpreted in a way that causes more harm than good.
Google's John Mueller cautioned on February 1 against excessive technical analysis for redirect optimization, stating most issues are visible during normal browsing. Mueller shared his perspective in response to a Reddit discussion where a user questioned whether auditing redirect chains using DevTools represented a "massive time-sink." The Google Search Analyst confirmed such analysis often proves excessive for search engine optimization purposes.
"There are a bunch of browser extensions that do this already," Mueller stated on February 3. He specifically cited Redirect Path from Ayima, noting it appears frequently in screenshots throughout the SEO community. Mueller emphasized fundamental distinctions between Content Security Policy and redirects, expressing confusion about connecting these separate technical concerns. "I don't recall a time when I ran into something like this causing SEO issues which weren't also visible to average users in their browsers," Mueller explained.
The timing of Mueller's statement coincides with heightened industry attention on distinguishing meaningful ranking factors from phantom concerns. Mueller confirmed in January 2026 that comment spam links have absolutely no effect on search rankings, neither positive nor negative, addressing another area where practitioners historically invested resources without impacting outcomes. Mueller's guidance reinforces patterns established through multiple statements throughout 2025: Google's ranking systems prioritize content quality and user satisfaction over technical optimization sophistication.
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