AI Answers Are Raising Big Questions About The Open Web’s Future

🔍 Read the full analysis: AI Answers Are Raising Big Questions About The Open Web’s Future on ThorstenMeyerAI.com

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Google’s fast-growing AI Mode is generating less advertising revenue per query than the company’s other search activity, Alphabet business chief Philipp Schindler told investors on Oct. 28. He gave no estimate of the financial effect; Alphabet’s Search and other revenue still rose 12% to $63.35 billion in the third quarter, leaving open how AI answers may affect the websites that rely on search referrals.

Schindler made the comment during Alphabet’s earnings call after analyst Doug Anmuth asked why search queries were growing at their fastest pace in five years while revenue growth had slowed. Schindler named currency movements as the largest factor behind the slowdown relative to the prior quarter, followed by retail and media spending. He then said strong growth in AI Mode queries had an impact because of lower monetization in the product. He did not say AI Mode had reduced Search revenue overall or provide a dollar figure for the effect.

Alphabet shares fell 12.6% on Oct. 29, their steepest one-day decline since the company went public in 2004, according to the source material’s cited coverage. Estimates of the decline in market value varied, from about $475 billion to $500 billion. A widely circulated headline described a 15% drop, but the supplied reporting did not confirm that figure at the close. Investors were also weighing Alphabet’s reported $9.1 billion in negative free cash flow and quarterly capital spending of $51.4 billion.

The earnings call did not provide a new measure of how many visits AI answers send to websites. Google said in July that its AI features sent billions of clicks to websites each week, but Schindler did not give an equivalent figure on the October call. That leaves a gap between what is known about Google’s monetization and the broader impact on publishers, forums and retailers.

The Cost of Answers Without Clicks

Search engines have long connected users with websites, which can earn revenue from advertising, subscriptions or sales when visitors arrive. AI answers can give users a more direct response, potentially reducing the need to open multiple results. If that behavior becomes common, publishers and other businesses could receive fewer visits even while the search platform handles more queries.

Evidence cited in the source material points to a broader traffic concern, but does not isolate AI Mode as its sole cause. Chartbeat’s publisher network saw Google Search’s share of pageviews fall from about 9% in July 2024 to 5% in July 2026. Pew Research found users clicked a result in 8% of visits when an AI summary appeared, compared with 15% when it did not. These figures describe different measures and do not establish that AI summaries caused the overall change in publisher traffic.

The commercial issue may differ for online shops. Google says its checkout standard covers hundreds of thousands of brands, raising the possibility that users could complete purchases without visiting a retailer’s website. The source material does not quantify how many sales currently happen this way or what portion of retailers’ business might be affected.

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How Google’s Search Model Is Shifting

AI Mode is Google’s chat-style search experience, where users can ask questions and receive synthesized answers. Schindler said AI Mode queries are three times longer than traditional searches, according to the source material, and described overall query growth as the fastest in five years. Longer questions and answer-style responses may create different opportunities for advertising than a page of conventional search results, but Google has not disclosed the revenue difference per query.

The third-quarter filing cited in the source material does not mention AI Mode. It attributes search growth to factors including query volume, advertiser spending and improvements to ad formats and delivery. Google’s broader business therefore continued to grow even as executives acknowledged that AI Mode was less monetizable at that point.

Policy and industry responses are also developing. The UK is requiring Google to offer an AI opt-out, the European Union is investigating, and five French publisher groups filed a complaint on Oct. 29, according to the supplied account. Google also pays more than 400 publications in a licensing pilot. These steps reflect disputes over access, compensation and control, though they do not settle how AI search will affect the open web.

“The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.”

— Philipp Schindler, Alphabet’s business chief, on the Oct. 28 earnings call

Traffic Effects Remain Unmeasured

Alphabet has not disclosed how much less revenue AI Mode generates per query, how much revenue it may be gaining from new query volume, or what the net effect is on Search. The company also did not provide an updated figure for clicks sent from AI features to websites on the Oct. 28 call. The July statement about billions of weekly clicks covers Google’s AI features and does not, in the supplied material, specify AI Mode alone.

Publisher traffic data and user click studies offer useful signals, but they do not establish that AI answers caused all observed changes. The source material also does not provide a consistent, independently verified measure of referrals from AI Mode to publishers, forums and shops. It remains unclear how the effects vary by subject, site, search format and type of business.

More Data Will Test the Trade-Off

Future Alphabet earnings calls and filings may clarify whether AI Mode’s share of queries, ad formats and monetization change over time. For website owners, the key measures to watch include referral traffic, the quality of visits and whether users complete actions such as subscriptions or purchases outside their sites. Google’s public reporting on clicks from AI features would help compare those outcomes with query growth.

Regulatory inquiries and publisher complaints in the UK, EU and France may also shape what controls or commercial arrangements Google must offer. The available information does not establish when those processes will conclude or what remedies may result. For now, the confirmed development is narrower: AI Mode is growing, Google says it earns less per query, and the effect on the wider web has not yet been quantified.

Key Questions

Did Google say AI Mode reduced Search revenue?

No. Schindler said strong growth in AI Mode queries affected monetization because the product was less monetizable. Alphabet’s Search and other revenue still grew 12% in the third quarter.

How much revenue did AI Mode cost Google?

Alphabet did not provide a dollar amount or a per-query comparison. The earnings call identified lower monetization as one factor but did not quantify its financial impact.

Did Alphabet shares fall 15%?

The supplied reporting says Class A shares fell 12.6% on Oct. 29. A 15% fall at the close was not confirmed in that material.

Is there proof that AI answers are reducing website traffic?

The source material cites declining Google Search pageview share in one publisher network and lower click rates when AI summaries appeared in a Pew study. Those findings do not by themselves prove that AI answers caused the broader traffic decline or establish AI Mode’s specific effect.

What should readers watch next?

Watch for further Alphabet disclosures on AI Mode monetization and website clicks, alongside traffic data from publishers and outcomes from regulatory reviews and publisher complaints.

Source: ThorstenMeyerAI.com