Google struggles to monetize AI search like traditional search
The Verge: Google hasn’t figured out how to make AI pay like its search engine
Google Chief Business Officer Philipp Schindler. | Bloomberg via Getty Images Search queries are growing at their fastest rate in five years, Google parent Alphabet said in its earnings report last week. However, Google's Search revenue growth slowed to 12 percent year over year in the third quarter, down from roughly 17 percent in the previous quarter. Meanwhile, growth in paid clicks - clicks on ads that generate revenue for Google - slowed from 13 percent to 8 percent. That's
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Google's parent company is spending roughly $200 billion this year on AI infrastructure, but the company has not yet figured out how to make money from AI search the way it does from traditional search. While search queries are growing at their fastest rate in five years, search revenue growth has slowed and AI Mode queries generate revenue at a lower rate than traditional searches. Advertisers can still see positive returns on Google, but they cannot separately track how AI ads are performing, leaving unclear whether AI will add new revenue or simply replace more profitable existing searches. Industry analysts say Google is facing its first major disruption to its core business in decades, and that finding effective ad formats for AI could take years while the company's mounting spending on AI raises the stakes.
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