Google Says AI Mode Earns Less. Reddit Says It Sends No Traffic. What AI Answers Are Doing To The Open Web

🔍 Read the full analysis: Google Says AI Mode Earns Less. Reddit Says It Sends No Traffic. What AI Answers Are Doing To The Open Web on ThorstenMeyerAI.com

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Google said fast-growing queries in its AI Mode search product were generating less monetization, while Reddit CEO Steve Huffman said the feature does not drive traffic to websites. Alphabet did not quantify the revenue effect, and its Search revenue still rose 12% to $63.35 billion in the third quarter, leaving the scale of the trade-off unresolved for publishers and other sites that depend on search visits.

On Alphabet’s October 28 earnings call, business chief Philipp Schindler listed lower monetization in AI Mode as one factor behind slower Search revenue growth. He also cited foreign-exchange movements as the largest factor in the slowdown relative to the previous quarter, alongside changes in retail and media advertising. Schindler gave no dollar estimate for AI Mode’s effect and described it as one of several factors, not the largest.

Reddit CEO Steve Huffman addressed the traffic question separately, saying: “The reality is, the AI mode does not drive traffic, not for us and not to anybody, as far as I know.” That is Huffman’s assessment, not a disclosed measurement of traffic across the web. Google has previously said its AI features send billions of clicks to websites each week, but no comparable click figure was offered on the October call.

Alphabet shares fell 12.6% on October 29, their steepest one-day decline since 2004, according to the cited market reports. Coverage put the lost market value at roughly $475 billion to $500 billion. The sell-off was not attributed to AI Mode alone: Alphabet also reported free cash flow of minus $9.1 billion, below the roughly minus $2.7 billion analysts expected, while quarterly spending on data centers and chips reached $51.4 billion.

The Search Click Is at Stake

The dispute matters because search referrals can bring readers to publishers, users to forums and shoppers to retailers. If an AI answer satisfies a query without a visit, a website may lose an opportunity to earn advertising revenue, build an audience or complete a sale. The financial effect differs by business and cannot be inferred from Google’s earnings comment alone.

Available evidence points to a potential change in user behavior, though it does not establish that AI Mode caused every decline. Chartbeat data cited in the source shows Google Search’s share of pageviews across its publisher network falling from about 9% in July 2024 to 5% in July 2026. Pew Research found users clicked a result in 8% of visits when an AI summary appeared, compared with 15% when it did not. These measures cover different settings and do not isolate the effect of AI Mode.

For Google, the business question is whether it can keep people using AI answers while earning enough from ads shown within them. The company says it is working to place more ads in AI responses. For sites, a separate risk is that people may get information or make a purchase without visiting the source. Google says its checkout standard covers hundreds of thousands of brands, but the source material does not provide sales or referral data showing the effect on those businesses.

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What Alphabet Disclosed

JPMorgan analyst Doug Anmuth asked during the October 28 call why searches were growing at their fastest pace in five years while Search revenue growth had slowed. Schindler said exchange rates were the single largest driver of the deceleration relative to the prior quarter. He also pointed to pressure on some Asia-Pacific retailers following the end of an EU customs exemption for low-cost parcels, and to media spending returning to normal after the football World Cup.

Schindler then said strong growth in AI Mode queries had an impact because Google was seeing lower monetization in AI Mode. He added that the company felt good about its trajectory. The statement confirms a difference in monetization, but it does not say how much less revenue AI Mode earns per query or how much total revenue was affected. Alphabet’s quarterly filing, as described in the source, did not mention AI Mode and instead cited query growth, advertiser spending and improvements to ad formats and delivery.

The source also reports that Google says AI Mode queries are three times longer than traditional searches and that overall query growth is at a five-year high. Those figures describe activity, not revenue or website referrals. Google has said its AI features send “billions of clicks to websites every week,” but the source notes that the company supplied no new click total during the October earnings call.

““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

The Missing Click and Revenue Data

The central unanswered question is how much less revenue AI Mode generates and how many visits it sends to outside websites. Google provided no dollar figure or current click count in the earnings call, while Reddit’s CEO did not cite a traffic study supporting his broader assessment. The available statements therefore do not establish the overall effect across publishers, forums or retailers.

It is also unclear how much of the publisher traffic change in the cited Chartbeat figures is attributable to AI answers rather than other shifts in search use, referrals or audience behavior. Pew’s comparison of click rates when an AI summary appears and does not appear shows an association, but the supplied information does not establish that the summary alone caused the difference.

The share-price decline also had multiple reported explanations. Alphabet’s cash flow and investment spending drew attention alongside concerns about AI monetization. The source material does not establish how investors apportioned the sell-off among those issues, and the estimates of market value lost vary by outlet.

Ads, Rules and Referral Measures

Google’s stated response is to develop more advertising inside AI answers, potentially improving monetization without returning users to a conventional results page. The company’s future earnings disclosures may show whether that approach narrows the gap, but the October call supplied no target, timeline or specific measurement for AI Mode revenue.

Regulatory and industry pressure is also developing. The source reports that the UK requires Google to offer an AI opt-out, the European Union is investigating, and five French publisher groups filed a complaint on October 29. Google also has a licensing pilot involving more than 400 publications. These steps may shape how publishers can participate in or challenge the use of their material, though their outcomes are not yet known.

For readers and businesses, the next useful evidence will be comparable reporting on referral clicks, advertising revenue and purchases from AI search features. Until Google discloses more detail—or independent measurement fills the gap—the confirmed picture is limited: AI Mode is growing, Google says it monetizes less, and the size of the effect on websites remains uncertain.

Key Questions

Did Google say AI Mode reduced Search revenue?

Google said AI Mode’s strong query growth had an impact because the queries were seeing lower monetization. It did not say that total Search revenue fell: Search revenue grew 12% to $63.35 billion in the third quarter.

How much revenue does Google lose from AI Mode?

Google did not provide a dollar figure or quantify how much less revenue AI Mode earns. Schindler described it as one factor in slower Search revenue growth, alongside exchange rates and other advertising conditions.

Does AI Mode send no traffic to websites?

Reddit CEO Steve Huffman said it did not drive traffic to Reddit or, as far as he knew, to anyone. That is an attributed statement, not a measured conclusion for the whole web. Google has previously said its AI features send billions of clicks to websites each week.

Why did Alphabet shares fall on October 29?

Alphabet shares fell 12.6%, their worst one-day decline since 2004, according to the cited reports. Concerns included AI monetization, but reports also highlighted free cash flow of minus $9.1 billion and $51.4 billion in quarterly data-center and chip spending. The decline was not tied to AI Mode alone.

Source: ThorstenMeyerAI.com