Google Says AI Mode Earns Less. Reddit Sees No Traffic. What’s Next?

🔍 Read the full analysis: Google Says AI Mode Earns Less. Reddit Sees No Traffic. What’s Next? on ThorstenMeyerAI.com

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Alphabet business chief Philipp Schindler said on October 28 that rapid growth in Google’s AI Mode had affected Search monetization because the queries were earning less. Alphabet did not disclose a dollar impact, and Search and other revenue still grew 12% to $63.35 billion in the third quarter. Reddit CEO Steve Huffman separately said AI Mode does not drive traffic to Reddit, raising questions about how the search feature’s answers affect the websites that have traditionally received visitors from Google.

Schindler made the remark during Alphabet’s earnings call in response to a question from JPMorgan analyst Doug Anmuth about why search queries were growing at their fastest pace in five years while Search revenue growth had slowed. Schindler named foreign exchange as the largest factor behind the slowdown relative to the previous quarter. He also cited softer retail and media spending before mentioning the lower monetization of fast-growing AI Mode queries.

His comment confirmed a direction, not a size: Alphabet did not say how much less revenue AI Mode generates per query, or how much the feature affected the quarter’s results. The company’s third-quarter filing did not mention AI Mode. It attributed Search growth to factors including query volume, advertiser spending and improvements to ad formats and delivery.

Alphabet shares fell 12.6% on October 29, their steepest one-day decline since 2004, according to reports cited in the source material. The loss in market value was estimated at roughly $475 billion to $500 billion. A 15% closing decline was not supported by those reports. The stock drop had other reported concerns behind it, including free cash flow of minus $9.1 billion and quarterly spending of $51.4 billion on data centers and chips.

The Cost of Answers Without Clicks

The dispute matters because Google’s search answers and publishers’ business models depend on the same user activity. AI Mode can give users a response without requiring them to open the websites that supplied information or have historically earned visits from search. If users get what they need directly on Google, publishers may lose referral traffic even as Google handles more queries.

Available measures point to a possible shift, but do not establish how much traffic AI Mode itself causes publishers to lose. The source material reports that Google Search’s share of pageviews across Chartbeat’s publisher network declined from about 9% in July 2024 to 5% in July 2026. Pew found users clicked a result in 8% of visits when an AI summary appeared, compared with 15% when it did not. Those figures describe different measures and do not, on their own, prove that AI Mode caused the change.

Retailers and other businesses face a related uncertainty: Google says it is expanding checkout within its AI shopping experience. If more transactions happen without a visit to a merchant’s site, the value of search may increasingly depend on sales attribution and commercial terms rather than referral counts alone. The effects on publishers, advertisers and merchants are still developing.

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What Alphabet and Reddit Reported

AI Mode is Google’s chat-style search experience. In July, Google said its AI features sent billions of clicks to websites each week, according to the source material. It did not provide a comparable traffic figure during the October earnings call, leaving no company-reported number there to show whether referral traffic has changed as AI Mode grows.

Google has said search query growth is at its highest level in five years and that AI Mode queries are three times longer than traditional searches. Longer queries may create different opportunities for ads, but Schindler’s comments indicate that the company was seeing lower monetization from AI Mode queries at the time. Google’s stated response includes adding more ads within AI answers.

Reddit’s Huffman offered a separate view from the perspective of a platform that relies on visitors and content discovery. The source material quotes him saying AI Mode does not drive traffic “not for us and not to anybody, as far as I know.” That is his assessment, not a complete measurement of traffic across the web. The source also reports policy and industry developments: a UK opt-out requirement, an EU investigation, a complaint filed by five French publisher groups on October 29, and a Google licensing pilot involving more than 400 publications.

“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

Traffic and Revenue Still Unmeasured

Alphabet has not disclosed AI Mode’s revenue per query, the total revenue effect, or the share of Search activity now taking place in the feature. It also has not supplied a traffic comparison in the earnings discussion that would show how many visits AI Mode sends to outside sites.

Huffman’s statement does not include traffic data or a methodology, and the source material does not establish that AI Mode accounts for the broader changes reported by publishers. The Chartbeat and Pew figures cover different periods and measures; they should not be read as a direct estimate of AI Mode’s impact. It is also unclear how much Google’s ad and checkout changes will offset lower monetization or fewer visits to external sites.

More Data Will Shape the Debate

The next useful evidence would be clearer reporting from Alphabet on AI Mode usage, monetization and outbound clicks, alongside independent traffic measurements that isolate AI-driven search from other changes. Alphabet’s next earnings disclosures may provide updated Search results, but the company has not announced a specific date or metric for reporting AI Mode’s individual contribution.

Policy and commercial developments will also affect what users and businesses can do. The source material says the UK requires Google to offer an AI opt-out, the European Union is investigating, and French publisher groups have filed a complaint. Google’s licensing pilot and expansion of in-answer advertising and checkout will be watched for evidence of how it shares value with publishers and merchants. Until more comparable figures are available, the confirmed point is limited: AI Mode was growing quickly and was earning less per query by Google’s account, while the size of its effects on revenue and website traffic remains unknown.

Key Questions

Did Alphabet say AI Mode reduced Search revenue?

No. Schindler said fast AI Mode growth affected Search monetization because the queries were earning less. Search and other revenue still increased 12% to $63.35 billion in the third quarter, and Alphabet did not give a dollar figure for AI Mode’s effect.

What caused Alphabet shares to fall?

Alphabet’s Class A shares fell 12.6% on October 29, their worst one-day decline since 2004, according to reports cited in the source material. AI Mode monetization was one concern, but reports also pointed to a larger-than-expected free-cash-flow shortfall and heavy spending on data centers and chips.

Does Google AI Mode send traffic to websites?

Google said in July that its AI features sent billions of clicks to websites each week, but it did not provide a comparable figure on the October earnings call. Reddit CEO Steve Huffman said AI Mode sends no traffic to Reddit and, as far as he knows, other sites. The overall effect remains unquantified.

What evidence is available about search traffic?

The source material cites Chartbeat data showing Google Search’s share of pageviews across its publisher network at about 9% in July 2024 and 5% in July 2026. Pew found clicks on results in 8% of visits when an AI summary appeared, versus 15% without one. These are separate measures and do not establish that AI Mode caused the differences.

Source: ThorstenMeyerAI.com