AI Mode, Publisher Earnings, And Reddit Traffic: What’s Changing?

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Alphabet business chief Philipp Schindler told investors on October 28 that rapid growth in Google AI Mode queries was weighing on Search revenue growth because those queries were generating less revenue. He gave no estimate of the financial effect, and Alphabet’s Search and other revenue still increased 12% to $63.35 billion in the third quarter.

Schindler made the remark during Alphabet’s earnings call, responding to a question about why search queries were growing at their fastest pace in five years while Search revenue growth had slowed. He named exchange rates as the largest factor behind the deceleration relative to the prior quarter, followed by pressure on some Asia-Pacific retailers and a normalization in media spending after the football World Cup. Lower monetization of fast-growing AI Mode queries was another factor, he said.

That supports a narrower claim than some headlines suggested: Google said AI Mode’s growth affected monetization, but did not say the product had pushed Search revenue into decline, a question explored in coverage of AI search. Search and other revenue was $63.35 billion, up 12% in the third quarter. Schindler did not disclose how much less revenue AI Mode earns per query or how much it changed the quarter’s results. Alphabet’s quarterly filing, dated October 29, does not discuss AI Mode specifically.

Alphabet shares fell 12.6% on October 29, their steepest one-day decline since the company went public in 2004, according to the source report’s cited coverage. Estimates of the company’s lost market value varied, from $475 billion to roughly $500 billion. The same coverage attributed investor concern in part to free cash flow of negative $9.1 billion and quarterly capital spending of $51.4 billion. Those figures point to several investor concerns, not just AI Mode.

AI Answers Put Clicks Under Pressure

The business question is whether Google can answer more searches directly while maintaining the value of its advertising and the flow of visitors to outside websites. AI Mode queries are longer and growing quickly, according to Google, but Schindler’s comments indicate that Google currently earns less from them than from other Search activity. The company’s stated response is to develop additional advertising within AI answers.

For publishers, fewer clicks from search can mean fewer page views and less opportunity to earn advertising or subscription revenue. The source report cites Chartbeat data showing Google Search’s share of page views across its publisher network fell from about 9% in July 2024 to 5% in July 2026. It also cites a Pew study in which users clicked a result in 8% of searches when an AI summary appeared, compared with 15% when one did not. Those figures describe different measures and do not, by themselves, establish that AI Mode caused the broader traffic changes.

Retailers and other businesses may face a related shift: users could get product information or complete a purchase without visiting a company’s own website. The report says Google’s checkout standard covers hundreds of thousands of brands. The commercial effect will depend on how often users buy through such tools, how advertising is placed, and whether companies receive enough referral traffic or other value in return.

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Search Growth Meets New Answer Formats

Google’s AI Mode is a chat-style search experience that provides synthesized answers and follow-up interaction. It is part of a broader change in search: instead of only presenting links, Google can respond directly on the results page. The shift may alter both the user journey and the points at which advertising appears.

Google previously said its AI features send billions of clicks to websites every week, according to the source report. Schindler did not give an equivalent traffic figure on the October earnings call. The absence of a new number does not show that clicks have stopped, but it leaves investors and publishers without a current company-wide measure to compare with Google’s monetization comments.

Regulatory and industry disputes are also developing. The report 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 October 29. Google also pays more than 400 publications through a licensing pilot, according to the source. These arrangements address parts of the relationship between AI services and publishers, but do not settle how traffic, attribution, or compensation may change across the wider web.

“The strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.”

— Philipp Schindler, Alphabet’s business chief, on the October 28 earnings call

The Missing Traffic and Revenue Measures

Alphabet has not disclosed the revenue gap per AI Mode query, the total amount of Search revenue affected, or how those figures compare with conventional searches. Its earnings-call comments establish that lower monetization was a factor, but not its size. The quarterly filing cited in the source report does not provide an AI Mode-specific breakdown.

It is also unclear how AI Mode changes referrals to websites across the full web. The publisher and Pew figures cited here concern broader Google Search traffic and clicks in specified samples; they do not isolate AI Mode’s contribution. Huffman’s statement reflects Reddit’s experience or judgment and does not establish a universal result. Google’s claim that its AI features send billions of weekly clicks was not updated with a new figure on the call.

The share-price decline also cannot be attributed to AI Mode alone. The source report describes concerns about cash flow and data-center and chip spending alongside questions about search monetization. The relative weight investors assigned to each factor is not established by the reported figures.

More Data Will Test Google’s Model

The next useful evidence would be a clearer breakdown from Alphabet of AI Mode advertising, revenue per query, and referral traffic. The company has said it plans to add more advertising within AI answers, but the source material does not specify when those changes will arrive or how they will affect revenue and website referrals.

Publishers and retailers will continue watching referral and conversion data as AI search features and checkout tools expand. Regulatory investigations and publisher complaints in Europe may also shape what options or commercial terms Google must offer. Until comparable figures are available, the confirmed picture is limited: AI Mode queries are growing, Google says they are less well monetized, and the size of the effect on both revenue and outside websites remains unreported.

Key Questions

Did Google say AI Mode reduced Search revenue?

No. Alphabet said fast growth in AI Mode queries affected Search monetization because those queries were earning less. Search and other revenue still grew 12% in the third quarter, reaching $63.35 billion.

How much revenue does AI Mode cost Google?

Alphabet did not give a dollar amount or a per-query comparison. Schindler named lower AI Mode monetization as one factor in Search’s slower growth, but said exchange rates were the largest driver of the deceleration relative to the previous quarter.

Did Alphabet shares fall 15%?

The source report says Class A shares fell 12.6% on October 29. It found no report of a 15% closing decline. Estimates of the lost market value differed, ranging from $475 billion to about $500 billion.

Is AI Mode reducing traffic to publishers?

The source report cites data showing lower Google Search page-view share for a Chartbeat publisher network and fewer clicks when Google AI summaries appeared in a Pew study. Neither measure isolates AI Mode’s effect, so they do not establish how much traffic AI Mode itself has diverted.

What is Google doing about lower AI Mode monetization?

Google has indicated that it is working to place more advertising within AI answers. The source material does not specify the rollout schedule or quantify how the ads could affect revenue, user experience, or website referrals.

Source: ThorstenMeyerAI.com