Alphabet says AI Mode made less money per search than classic results

Google is spending more on its AI answers than those answers are earning back. Search Engine Journal reported on 28 October that Alphabet's third-quarter call blamed AI Mode. The outlet said CBO Philipp Schindler named it as one reason Search revenue slowed. He put it alongside currency moves and weaker retail spending.

Alphabet reported Google Search revenue of $63.35 billion for the quarter. That was up 12 percent on a year earlier. Growth has slowed for three quarters in a row, Search Engine Journal said. Q1 grew 19 percent and Q2 grew 17 percent. CEO Sundar Pichai said query growth was at a five-year high. He wrote that in his earnings-call message on the Google blog.

What Alphabet said about AI Mode

Pichai wrote on the Google blog that AI Mode queries are, on average, three times longer than classic searches. One in five of them use voice, images or documents. Pichai also wrote that AI Overviews and AI Mode are the main reason query growth is up.

Search Engine Journal quoted Pichai on money. He said Google is "building the best Search user experience, followed by monetization."

Pichai compared it to the move from desktop to phones. The outlet read the comment as Google accepting a short-term gap. Google wants to build out the ad surface for AI Mode first.

What Google says works, and the number behind it

Vijay Thakur, Google's vice president for Search Ads, told Search Engine Journal about click rates. He said sponsored product listings in AI Mode now get a similar click rate to organic listings in AI Mode. The data covers US shoppers between 20 August and 3 September 2026. Thakur did not say how that compared with classic Search. That is the comparison that would matter more for a seller.

Search Engine Journal said Google expanded AI Mode ads to 10 more countries this quarter. More are planned by the end of the year. The company also launched follow-up ads in the United States. One can appear after the first AI Mode answer.

What a site owner can do with this

A reader whose site earns from Google Search clicks sees a second quarter of change. The classic blue links keep losing space to AI Overviews and AI Mode. Google is now saying it has not yet matched the dollars that space used to carry. AI Mode pages carry external links, and some sites will gain new clicks from them. The money is still catching up.

For a buyer running Google Ads, the Thakur quote is the useful piece. Google is saying sponsored products in AI Mode click like organic ones. The surface takes ads the same shape as classic shopping. A buyer should expect it to work that way. Ask the Google rep for AI Mode placement reports as they appear.

Source

• Google Says Lower AI Mode Monetization Weighed On Search Growth, Search Engine Journal, Matt G. Southern
• Q3 2026 earnings call: Remarks from our CEO, Google blog, Sundar Pichai