Google hasn’t figured out how to make AI pay like its search engine

Alphabet reported that Search revenue growth slowed to 12 percent year over year in the third quarter, down from roughly 17 percent, while paid-click growth fell from 13 percent to 8 percent, and shares have dropped about 14 percent since earnings as investors question AI spending. Google says AI Mode queries are growing strongly but monetize at a lower rate than traditional searches, and it is expanding ads in AI Overviews and AI Mode while advertisers cannot yet isolate how that inventory performs. Analysts told The Verge that Google, like OpenAI, is still working out how to make ads work in AI, and an October working paper found ChatGPT ad visits generated $0.89 per session for retailers versus $2.45 from Google Search ads.