Google says AI Mode earns less than search, then puts ads in it worldwide
Google search revenue grew 12% in the third quarter, down from 19% in the first and 17% in the second. On the earnings call, chief business officer Philipp Schindler attributed part of the slowdown to "lower monetization we were seeing in AI Mode," the chat-style search Google has been pushing users toward. Search queries grew at their fastest rate in five years. Each one earns less.
Google's answer, announced alongside the results, is to sell ads inside AI Overviews and AI Mode outside the US for the first time, and to add ads that run across several turns of a conversation in the US. Schindler said sponsored listings in AI Mode get click-through rates comparable to organic ones, without a number. Alphabet shares fell between 8% and 10% after the results, depending on the report. This is the test of whether conversational search can carry the advertising business it is replacing. SourcesABB
Sources
- AAlphabet third-quarter 2026 earnings releases206.q4cdn.com
- BGoogle expands AI search ads globally as core ad growth slows (TechCrunch)techcrunch.com
- BGoogle struggling to make AI Mode searches pay (The Register)theregister.com
This story ran in the Morning Brief of October 29th 2026.