AI Mode’s Earnings And Reddit’s Traffic: Two Signals, One Web Shift

🔍 Read the full analysis: AI Mode’s Earnings And Reddit’s Traffic: Two Signals, One Web Shift on ThorstenMeyerAI.com

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Google said AI Mode’s fast-growing queries brought in less revenue per query than other search activity, while Reddit CEO Steve Huffman said the feature does not send traffic to Reddit. The statements, made during the week of Alphabet’s third-quarter results, highlight a tension for the web: AI answers can satisfy users directly, but may produce less advertising revenue for Google and fewer visits for publishers and forums.

Alphabet business chief Philipp Schindler addressed the issue on the company’s October 28 earnings call. He said AI Mode’s growth had an impact because of “the lower monetization we were seeing in AI Mode.” He did not quantify the revenue effect or say that AI Mode had caused Search revenue to fall. Alphabet reported that Search & other revenue rose 12% to $63.35 billion in the third quarter.

Schindler named other factors behind a slowdown in search revenue growth: exchange rates, which he called the largest factor relative to the previous quarter, and changes in retail and media spending. He also said Google was seeing its fastest query growth in five years and that AI Mode queries were three times longer. Google’s proposed response is to develop more advertising within AI answers, but the company has not disclosed how much those ads currently earn or how that compares with standard search ads.

Reddit CEO Steve Huffman offered a separate measure of the change: traffic. He said, “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 Google-wide traffic measurement. Alphabet said in July that its AI features sent “billions of clicks to websites every week,” but the October earnings call included no updated click figure specifically for AI Mode.

The Cost of Answers Without Clicks

The figures point to two related but distinct questions: how Google earns from AI answers and whether those answers send people onward to other sites. If users get what they need within a search result, publishers, forums and businesses may receive fewer visits even when Google continues to attract more queries. For Google, the challenge is to make AI search commercially effective without relying on the same pattern of ads and clicks as conventional results.

Some available research suggests that click-through behavior can differ when AI summaries appear. A Pew Research Center analysis cited in the source material found that users clicked a traditional result in 8% of visits when an AI summary appeared, compared with 15% when it did not. That finding does not measure AI Mode specifically, and it should not be treated as a direct estimate of the effect on every publisher. Still, it helps explain why traffic figures matter alongside revenue reports.

Retailers may face another change: a purchase could happen through an AI-supported checkout without the shopper visiting the merchant’s site. Google says its checkout standard covers hundreds of thousands of brands. That could simplify buying for consumers, while leaving questions about how merchants retain customer relationships and understand where sales came from.

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What the Earnings Call Established

The market reaction was sharp, but it does not establish that AI Mode alone drove the decline. Alphabet’s Class A shares fell 12.6% on October 29, their worst daily performance since 2004, according to reports cited in the source material. Estimates of lost market value ranged from about $475 billion to $500 billion. The widely circulated claim of a 15% closing decline was not supported by those reports.

Investors were also reacting to spending and cash flow. Alphabet reported negative free cash flow of $9.1 billion, compared with analysts’ expectation of roughly negative $2.7 billion, CNBC reported. Quarterly spending on data centers and chips reached $51.4 billion. These figures complicate any attempt to explain the share-price drop as a verdict on AI Mode alone.

Traffic evidence is also incomplete. Chartbeat data cited in the source material showed Google Search’s share of pageviews across its publisher network falling from about 9% in July 2024 to 5% in July 2026. That is a change within Chartbeat’s network, not a count of all web traffic or proof that AI Mode caused the decline. Google has said its AI features send billions of weekly clicks, but the company has not provided a comparable current figure for AI Mode in the materials described here.

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

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

The Missing Traffic and Revenue Measures

Alphabet has not disclosed how many dollars AI Mode’s lower monetization represents, how its revenue per query compares with traditional search, or whether the gap is narrowing. The earnings call established that the effect exists, in Google’s account, but not its size. The company’s quarterly filing, as described in the source material, did not mention AI Mode specifically.

There is also no current, comparable figure in the cited material for AI Mode referrals to websites. Google’s July statement covered AI features collectively, while Huffman’s statement described Reddit and his understanding of other sites. Publisher-network data and click studies can indicate patterns, but do not establish that AI Mode caused a particular site’s traffic loss. It remains unclear how much of any change comes from AI answers, changes in search habits, seasonality or other sources.

Regulatory and commercial rules are still developing. The source material 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 has a licensing pilot with more than 400 publications. The terms, reach and practical effects of these measures are not detailed in the material.

More Data Will Test the Shift

The next useful evidence will be comparable reporting from Google on AI Mode’s advertising revenue, query volume and outbound clicks. Later earnings calls may clarify whether new ads in AI answers narrow the monetization gap, and whether growth in AI Mode changes overall Search revenue or only its rate of growth.

Publishers and platforms will also be watching referral data, user behavior and the outcome of regulatory actions. Those developments could show whether AI search results are mostly a new route to websites, a substitute for visits, or a mixture that varies by query and business. For now, Alphabet’s revenue results confirm that Search is still growing, while its comments and Reddit’s account show why the distribution of that growth remains contested.

Key Questions

Did Google say AI Mode reduced Search revenue?

No. Google said AI Mode queries were less monetizable and that their growth affected Search revenue growth. Alphabet still reported a 12% rise in Search & other revenue, to $63.35 billion, for the third quarter.

How much revenue did AI Mode cost Google?

Alphabet did not give a dollar figure. The company identified lower monetization as one factor affecting Search, but did not quantify the gap between AI Mode and conventional search.

Does AI Mode send traffic to websites?

The available statements do not settle that question across the web. Reddit CEO Steve Huffman said it sends no traffic to Reddit and, as far as he knew, to others. Google previously said its AI features collectively sent billions of clicks to websites each week, but no updated AI Mode-specific figure was provided in the cited earnings-call account.

Was Alphabet’s October 29 share-price fall caused by AI Mode?

The share-price decline is confirmed, but the available information does not show that AI Mode alone caused it. Reports also cited concerns about Alphabet’s cash flow and heavy spending on data centers and chips.

Source: ThorstenMeyerAI.com