AI Mode Earns Less, Reddit Gets No Traffic: A Snapshot Of The Open Web

🔍 Read the full analysis: AI Mode Earns Less, Reddit Gets No Traffic: A Snapshot Of The Open Web on ThorstenMeyerAI.com

Before you orderOffer from Amazon

Get the little things that make your day delivered free with Prime

• Fast, free delivery on millions of items
• Prime Video, Amazon Music and more included
• Member-only deals all year

Start your free Prime trial →Free trial for eligible customers · Cancel anytime

As an affiliate, we earn on qualifying purchases.Hide

Alphabet said on October 28 that rapid growth in Google’s AI Mode queries weighed on Search monetization because they generated less revenue than other searches, but the company did not quantify the effect. Search and other revenue still grew 12% to $63.35 billion in the third quarter, making the disclosure about lower monetization—not a reported decline in Search revenue.

Google business chief Philipp Schindler made the comment during Alphabet’s earnings call, responding to a question about why search activity was growing at its fastest pace in five years while Search revenue growth had slowed. He named three contributing factors: foreign exchange rates, changes in retail and media spending, and lower monetization of fast-growing AI Mode queries. Schindler described currency as the largest factor in the deceleration relative to the previous quarter. He provided no dollar estimate for AI Mode’s effect and did not say it had reduced Search revenue overall.

The distinction matters because a headline circulated after the call described Google as admitting AI Mode hurt Search revenue. The company’s reported results show that Search and other revenue increased year over year. The source also reports Alphabet Class A shares fell 12.6% on October 29, their worst one-day percentage decline since 2004. Reports put the loss in market value at different estimates, from about $475 billion to $500 billion; the source found no support for a 15% closing decline.

Alphabet faced concerns beyond AI monetization. The source says free cash flow was negative $9.1 billion, compared with analysts’ expected negative $2.7 billion, while quarterly spending on data centers and chips reached $51.4 billion. Those figures offer additional context for the share-price move, but do not establish how much any single issue contributed to it.

The Cost of AI Search Answers

The disclosure highlights a business tension for Google: AI answers may attract more queries while earning less per query than conventional search. If people get information directly in an AI response, they may have less reason to click through to a publisher, forum or retailer. That could affect the referral traffic many sites rely on, even if Google’s own search activity and revenue continue to grow.

The available evidence does not establish a uniform or fully measured effect across the open web. The source cites Chartbeat data showing Google Search’s share of pageviews across its publisher network falling from about 9% in July 2024 to 5% in July 2026. It also cites a Pew study in which users clicked a result in 8% of visits when an AI summary appeared, versus 15% when one did not. These are different measures and should not be treated as a direct estimate of AI Mode’s effect on every publisher.

For businesses, the issue may extend beyond website visits. The source says Google’s checkout standard covers hundreds of thousands of brands, raising the possibility that some purchases could happen through AI-assisted experiences without a conventional visit to a retailer’s site. The financial and traffic consequences depend on how these products develop and how users behave.

Products Worth Considering

Oral-B iO Series 5 Rechargeable Electric Toothbrush with Travel Case, White

AmazonView Latest Price

Fitbit Sense Health & Fitness Smartwatch (White/Gold, International Version)

AmazonView Latest Price

Blueair Blue Pure 511i Max Smart Air Purifier

AmazonView Latest Price

As an affiliate, we earn on qualifying purchases.

What Alphabet’s Call Established

The claim at the center of the story came during Alphabet’s third-quarter earnings call on October 28. JPMorgan analyst Doug Anmuth asked why search queries had accelerated while Search revenue growth slowed. Schindler’s answer identified currency, retail and media trends, and the lower monetization of AI Mode queries. His remarks established that Google saw a monetization difference; they did not disclose its scale or isolate it from the other factors.

Alphabet’s quarterly filing, submitted on October 29, did not mention AI Mode, according to the source. It attributed Search growth to factors including higher query volumes, advertiser spending and improvements to ad formats and delivery. In July, Google said its AI features sent billions of clicks to websites each week. The source says no comparable traffic figure was provided on the October earnings call.

Regulatory and industry debates are also underway. The source reports that the UK requires Google to offer an AI opt-out, the European Union is investigating, and five French publisher groups filed a complaint on October 29. It also says Google is paying more than 400 publications through a licensing pilot. These developments reflect ongoing disputes over control of AI-generated search experiences and the use of publisher material; they do not by themselves establish the eventual outcome.

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

— Philipp Schindler, Google business chief, on Alphabet’s October 28 earnings call

The Missing Traffic and Revenue Measures

Alphabet has not publicly quantified how much lower AI Mode monetization is, how much it affected third-quarter revenue growth, or how that figure compares with the effects of currency and advertising trends. The company’s earnings call also did not provide a current measure of clicks from AI Mode to outside websites. Google’s earlier statement about billions of weekly clicks from its AI features does not answer how many visits AI Mode itself sends or how those visits have changed over time.

The publisher statistics cited here cover specific studies and networks, not the entire web. The source does not provide enough detail to attribute every change in referral traffic to AI answers, or to establish that results for publishers, forums and shops are the same. Huffman’s comment is an attributed view, while the precise traffic effects on Reddit and other sites remain unverified in the material provided. The reasons investors sold Alphabet shares also cannot be reduced to AI monetization alone.

Google’s Next Traffic and Ads Data

The next useful evidence will be whether Alphabet provides a clearer breakdown of AI Mode’s monetization and referral traffic in future earnings disclosures. Google has said it is adding more advertising inside AI answers, according to the source; future reporting can show whether that changes revenue per query without reducing the value of links to outside sites.

Publishers, retailers and forums will also be watching their own referral and conversion data as AI search products expand. Regulatory investigations and publisher complaints may bring further information about Google’s practices, but their outcomes and timing are not established here. For now, the confirmed picture is narrower: AI Mode queries are growing quickly and monetize less, while Search revenue remains higher year over year and the net effect on the open web is still unclear.

Key Questions

Did Google say AI Mode caused Search revenue to fall?

No. Google said fast growth in AI Mode queries weighed on monetization. Search and other revenue still grew 12% to $63.35 billion in the third quarter.

How much revenue did AI Mode cost Google?

Alphabet did not provide a dollar estimate or quantify AI Mode’s effect on Search revenue growth. Schindler named it as one of several factors behind the slowdown.

Did Alphabet shares fall 15%?

The source reports a 12.6% closing decline for Class A shares on October 29. It says the 15% figure was not supported for the close; estimates of market value lost vary by report.

Is there proof AI Mode sends no traffic to websites?

No. Reddit CEO Steve Huffman said AI Mode did not drive traffic to Reddit or, as far as he knew, other sites. That is an attributed assessment, and the source says Google did not give a current AI Mode-specific referral figure.

What should readers watch next?

Future Alphabet disclosures may clarify AI Mode revenue and referral traffic. Publishers and retailers will also be tracking visits and sales as AI search features and advertising change.

Source: ThorstenMeyerAI.com