Google hasn’t yet figured how to make AI pay like its search engine

Search growth loses momentum

Alphabet reported that search queries grew at their quickest pace in five years. Yet Google Search revenue growth fell to 12 percent in the third quarter from about 17 percent in the previous quarter, while paid-click growth slipped from 13 percent to 8 percent.

Google Chief Business Officer Philipp Schindler pointed to currency movements and changes in some advertisers’ spending as key factors. He also said AI Mode searches were increasing quickly but generated less revenue per query than conventional searches.

AI changes the search experience

Google results now vary with the kind of query. AI Overviews provide generated summaries, while AI Mode lets people search through a conversation; shoppers looking for products such as Nike shoes may still see shopping listings and text ads.

Schindler said most AI Mode queries add questions rather than replace existing searches. He described many as early-stage purchase research, which Google views as a chance to show ads later in the decision process.

Ad returns remain hard to isolate

Google is widening advertising in AI Overviews and AI Mode, including in other countries and across multiple turns of US AI Mode conversations. The company has also discussed ads in its Gemini app, but has not said when they might arrive.