AINov 2, 2026, 8:51 PM UTC·2 min read

Google's AI Mode Search Earns Less, Pushing Ads Into Answers

Alphabet says AI Mode monetizes worse than classic search, and search revenue growth slowed. Google's likely answer is more ads inside AI-generated results.

Google search page showing an AI-generated answer with sponsored ads placed around it — Image: xataka.com

SUMO

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Google has built a search engine so good at answering questions that it is starting to hurt the company's own business. Alphabet reported a sharp slowdown in search revenue growth, with almost no difference from the second quarter, which had already been weaker than the first. According to Google itself, one reason is that AI Mode monetizes worse than traditional search.

A better product, less ad space

AI Overviews and AI Mode were Google's answer to a long-running complaint: classic results had become hard to use, and finding something decent took effort. An AI-written answer solves the question without the user clicking through to anything else.

That is good for users, but it leaves less room for ads, or ads that are worth less. Search advertising has long been Google's most valuable business, so every query that moves to AI Mode and pays less than the one before it matters.

The obvious fix

The logical response is to show more ads. Philipp Schindler, Google's chief business officer, addressed the issue, and the direction is clear: Google will not remove AI from search, so it has to find a way to blend advertising with Gemini's text.

That is harder than placing an ad among a list of links. A sponsored product recommendation inside a text that is supposed to be impartial can undermine trust, and credibility is easy for an AI product to lose.

What it means

Google is not in trouble. It continues to grow at double digits. The concern is structural: each search that migrates to AI Mode earns less than the last, and the main lever the company has is the familiar one, more advertising.

The risk is that Google ends up where it started, with a search engine that serves advertisers better than users. How the company integrates ads into Gemini's answers, and whether people accept them, will decide whether the AI search upgrade stays a clear gain for those who use it.

The pressure also fits a wider pattern, in which even giants such as Google and Meta struggle to fund their AI spending from existing businesses alone.