What Lower AI Mode Earnings And No Reddit Traffic Say About AI Search

🔍 Read the full analysis: What Lower AI Mode Earnings And No Reddit Traffic Say About AI Search on ThorstenMeyerAI.com

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Google said on Oct. 28 that rapid growth in its conversational AI Mode affected Search’s revenue growth because the queries were generating less revenue per query. Alphabet did not disclose the size of that effect, and Search revenue still increased 12% to $63.35 billion in the third quarter. Reddit CEO Steve Huffman said AI Mode did not drive traffic to Reddit, underscoring the unresolved question of whether AI answers can serve users while sending fewer visitors to the sites that provide information.

Alphabet business chief Philipp Schindler made the comment during the company’s earnings call, responding to a question about why Search queries were growing at their fastest pace in five years while revenue growth had slowed. He identified foreign exchange rates as the largest factor in the deceleration relative to the previous quarter, followed by retail and media spending. He then said strong growth in AI Mode queries had an impact because Google was seeing lower monetization in AI Mode.

Schindler gave no dollar estimate for AI Mode’s effect and did not say that Search revenue had fallen. The third-quarter results showed Search and other revenue grew 12% year over year to $63.35 billion. Alphabet’s quarterly filing attributed Search growth to more queries, advertiser spending and improvements to ad formats and delivery; it did not discuss AI Mode, according to the source report.

Huffman’s separate comment concerned referrals, not Google’s revenue. He said, “The reality is, the AI mode does not drive traffic, not for us and not to anybody, as far as I know.” That is his assessment, not a company-wide measurement of referral traffic. Google said in July that its AI features sent “billions of clicks to websites every week,” but the source report says the October earnings call included no comparable figure.

The Gap Between Answers and Clicks

The figures point to a business-model tension: AI answers may draw more search activity while producing less revenue per query and, potentially, fewer visits to external sites. Google has an incentive to develop a format users engage with, but publishers and other businesses may depend on search referrals to attract readers or customers. The available information does not establish that AI Mode is causing a broad decline in traffic or quantify its financial effect.

Some research cited in the source report indicates that the concern extends beyond Reddit. Chartbeat data showed Google Search’s share of pageviews across its publisher network fell from about 9% to 5% between July 2024 and July 2026. Pew Research measured clicks on results in 8% of visits when an AI summary appeared, compared with 15% when it did not. Those figures describe different measures and periods; they do not, by themselves, establish how much of any change was caused by AI Mode.

For retailers, the potential shift is different: a customer may complete a purchase through an AI-assisted experience without visiting a shop’s website. The source report says Google’s checkout standard covers hundreds of thousands of brands. Whether this leads to more sales, less control for merchants, or both remains unsettled.

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What Alphabet Told Investors

The market reaction added to attention around Schindler’s remarks. Alphabet Class A shares fell 12.6% on Oct. 29, their worst one-day decline since the company listed in 2004, according to Fortune and CNBC. Reports put the loss in market value at figures ranging from $475 billion to about $500 billion. The source material found no evidence that the shares fell 15% at the close, as one widely circulated headline claimed.

AI Mode was one of several issues investors weighed. Alphabet reported negative free cash flow of $9.1 billion, compared with an analyst expectation of about negative $2.7 billion, CNBC reported. Quarterly spending on data centers and chips reached $51.4 billion. These figures do not show that AI Mode alone caused the share decline.

Google has said AI Mode queries are three times longer than traditional searches and that overall query growth is strong, according to the source report. Schindler said the company planned to add more advertising within AI answers. Those statements describe Google’s product and monetization plans; they do not provide a measure of resulting ad revenue or website referrals.

“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 Oct. 28 earnings call

The Missing Referral and Revenue Data

Google has not disclosed how much less revenue it earns from an AI Mode query compared with a traditional search, or how much the feature affected the quarter’s revenue growth. It also did not provide a current, comparable count of clicks from AI Mode to websites in the earnings-call material described by the source.

Huffman’s statement does not establish that AI Mode sends no traffic to any site. The source report does not provide a Reddit referral dataset or a measurement covering publishers, retailers and other destinations. The cited Chartbeat and Pew findings offer evidence about search referrals and click behavior, but they do not isolate AI Mode’s impact from other changes in search and online traffic.

It also remains unclear how Google’s planned ads and checkout tools will change the balance between answers, advertising revenue and visits to outside businesses. The share-price decline cannot be attributed to AI Mode alone, given Alphabet’s other financial results and spending concerns.

More Ads, Closer Traffic Scrutiny

Google’s stated response is to develop advertising inside AI answers as AI Mode use grows. Future earnings disclosures, if they include comparable figures, may clarify whether that approach closes the monetization gap. A useful assessment would also require consistent data on how often AI Mode sends people to external sites.

Regulatory and industry scrutiny is continuing, according to the source report. It says 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. Google also has a licensing pilot involving more than 400 publications. These developments may shape how publishers can control or license the use of their material, but their eventual effects are not yet established.

For now, the confirmed development is narrower than some viral headlines suggested: Google acknowledged lower monetization in fast-growing AI Mode queries, while Search revenue continued to grow. The next evidence needed is clearer reporting on revenue per AI query and referrals to publishers, forums and merchants.

Key Questions

Did Google say AI Mode reduced Search revenue?

No. Google said fast growth in AI Mode queries affected Search’s revenue growth because the queries were less effectively monetized. Search and other revenue still grew 12% to $63.35 billion in the third quarter.

How much revenue did AI Mode cost Google?

Google did not provide a dollar figure or quantify the difference in revenue per query. The available comments identify a direction of impact, not its size.

Did Alphabet shares fall 15% after the earnings call?

The source report says Class A shares fell 12.6% at the Oct. 29 close. It found no support for a 15% closing decline. Estimates of the lost market value varied by outlet.

Does Reddit’s comment prove AI Mode sends no website traffic?

No. Huffman said AI Mode did not drive traffic to Reddit and added “as far as I know” when speaking more broadly. His comment is not a comprehensive measurement of referrals to all websites.

What evidence is available about search traffic to publishers?

The source report cites Chartbeat data showing Google Search’s share of pageviews across its publisher network fell from about 9% to 5% between July 2024 and July 2026. It also cites Pew findings of clicks on results in 8% of visits when an AI summary appeared, versus 15% when one did not. Neither measure alone proves AI Mode caused the difference.

Source: ThorstenMeyerAI.com