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

Google's Search revenue growth slowed to 12% year over year in Q3, down from 17% in the previous quarter, due to slower growth in paid clicks and higher costs associated with AI infrastructure. Alphabet shares fell 14% after the earnings report. Google's AI makeover has led to strongly growing AI Mode queries, but these queries are not monetizing at the same rate as traditional searches. The company's ad experiments have shown promising results, but it's unclear whether this is due to a deliberate rollout of ads or a fundamental problem with advertising in AI search. eMarketer principal analyst Nate Elliott notes that AI is changing how people find information and may affect Google's business model.