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

By Thorsten Meyer | October 31, 2026 | ThorstenMeyerAI.com

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Imagine a tourist office that used to hand out maps to the restaurants in town. Now it describes every dish so well that many visitors skip the restaurant. The visitors are happy. The restaurants notice the empty tables. And the tourist office has just found out that it earns less from a description than it did from a map.

That, in one picture, was this week in search. On Wednesday, 28 October, Google’s business chief Philipp Schindler told investors that fast growth in AI Mode, Google’s chat-style search, “had an impact because of the lower monetization we were seeing in AI Mode.” On Thursday, Alphabet’s shares had their worst day since the company listed in 2004. And Reddit’s chief executive Steve Huffman said of the same product: “The reality is, the AI mode does not drive traffic, not for us and not to anybody, as far as I know.”

A headline that circulated on Friday went further: “Google admits AI Mode hurts Search revenue; -15% $500B drop worst since 2004 IPO.” This piece checks that claim against Alphabet’s own documents. Then it follows the clicks: what AI answers do to traffic for publishers, forums and shops, what Google says about it, and what it means for companies and users. Yesterday’s piece on Reddit’s login wall is the starting point. Here I go further on Google.

A transparency note: thorstenmeyerai.com belongs to a network of publisher websites that earns money when readers arrive from search engines. So I have a stake in this story. I keep Google’s statements, independent research and my own reading apart, and I say which is which.

Key takeaways

• Google did not say AI Mode shrinks its revenue. Search & other revenue grew 12% to $63.35 billion in the third quarter. Schindler named three reasons for the slowdown: exchange rates first, then retail and media spending, and the “lower monetization” of fast-growing AI Mode queries. He gave no dollar figure.
• The crash was real, the headline numbers were rounded up. Alphabet’s Class A shares fell 12.6% on 29 October, their worst day since 2004 (Fortune, CNBC). Estimates of the lost market value range from $475 billion (Yahoo Finance) to about $500 billion (CNBC). I found no report of a 15% fall at the close. Cash burn and spending drove the drop too.
• More questions, less money per question. Google says query growth is the highest in five years and AI Mode queries are three times longer. Its fix: more ads inside AI answers.
• The missing number is clicks to websites. In July, Google said its AI features send “billions of clicks to websites every week”. In the October call there was no such figure.
• Publishers see the drop. Google Search fell from about 9% to 5% of pageviews across Chartbeat’s publisher network between July 2024 and July 2026. Pew measured 8% clicks on results when an AI summary showed, 15% without.
• Shops face a different risk: the sale without the visit. Google’s checkout standard now covers “hundreds of thousands of brands”.
• The rules are moving. The UK makes Google offer an AI opt-out, the EU is investigating, and five French publisher groups filed a complaint on 29 October. Google pays more than 400 publications in a licensing pilot.

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Fact check: what Google actually said

The quote comes from Alphabet’s earnings call on 28 October. JPMorgan analyst Doug Anmuth asked why searches grew at the fastest pace in five years while search revenue slowed. Schindler’s answer, from Alphabet’s own transcript: “First, there was FX. It was the single largest driver of Search deceleration relative to Q2.” FX means exchange rates. Second, some Asia-Pacific retailers were hit when the EU ended its customs exemption for cheap parcels, and media spending normalized after the football World Cup. Then came the sentence everyone quoted: “It’s worth noting that the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode. To be clear, we feel very good about our trajectory here.”

So Google confirmed a direction, not a size. AI Mode is one of three named factors, and not the biggest. The context makes the comparison clear: the analyst had asked whether AI answers simply carry fewer ads than classic results. But Schindler put no number on the gap and did not say how much revenue it cost, as Search Engine Journal also noted. The quarterly report (10-Q) filed on 29 October does not mention AI Mode at all. It explains search growth with more queries, advertiser spending and “improvements we have made in ad formats and delivery.”

The viral headline, checked piece by piece:

• “Worst since 2004 IPO”: confirmed. CNBC calls it Alphabet’s worst day ever, past the previous record of 11.63% in March 2020.
• “-15%”: not confirmed for the close. Fortune reports that Class A shares fell 12.6% to $283.82. CNBC and Yahoo Finance say nearly 13%.
• “$500B”: a round number. CNBC says about $500 billion, Fortune about $482 billion, and Yahoo Finance corrected its figure to $475 billion.
• “Google admits AI Mode hurts Search revenue”: overstated. Google said AI Mode growth weighed on the growth rate. Search revenue still rose 12%.

Investors also had other worries. Alphabet’s free cash flow, the money left after investments, was minus $9.1 billion, far worse than the roughly minus $2.7 billion analysts expected, CNBC reported. Spending on data centers and chips reached $51.4 billion in the quarter. Why the market punished that cash burn is in Same Night, Opposite Verdicts. Stock moves here are reported facts, not investment advice.

Google’s numbers: more questions, less money per question

Google’s case is that AI makes people search more. “Our year-over-year query growth rate is the highest it’s been in the last five years,” CEO Sundar Pichai said in his prepared remarks. Queries in AI Mode are “on average three times longer than traditional searches,” and one in five uses voice, images or documents. AI Mode has passed one billion monthly users, Google says. Schindler added that “the majority of AI Mode queries are incremental,” meaning questions people would not have typed into classic search.

The money lags behind. Search revenue growth slowed from 19% in the first quarter to 17% in the second and 12% in the third. In the 10-Q, paid clicks, the clicks on Google’s own ads, rose 8%, and the average price per click 4%.

My reading: a long conversation in AI Mode has fewer obvious places for an ad than a page of links with ads on top. Google’s fix is to add them. It is scaling ads in AI Overviews and AI Mode to ten more countries and into follow-up questions in the U.S. What that means for advertisers is covered in When the Answer Carries the Ad.

One more line in the 10-Q matters for publishers. Revenue from ads Google places on other companies’ websites and apps, called Google Network, rose only about 1% to $7.46 billion, and AdSense, the program many websites use, brought in less. The filing does not link that to AI.

What the call did not contain is just as telling. In July, Pichai said Google was “sending billions of clicks to websites every week through AI features in Search” (Q2 transcript). In the October remarks and call transcript I found no figure on clicks to websites, and no analyst asked about it.

Publishers: where the clicks go

For publishers, the question is not Google’s revenue but the click. Independent data points in one direction, with caveats.

• Pew Research Center, March 2025 browsing data from 900 U.S. adults: when a Google results page showed an AI summary, users clicked a traditional result in 8% of visits, against 15% without one. They clicked a link inside the summary in 1% of visits. And 26% of those visits ended the browsing session, against 16% (Pew, 22 July 2025).
• Chartbeat, which measures traffic for news and media sites: Google Search’s share of pageviews in its network fell from roughly 9% in July 2024 to 5% in July 2026 (Chartbeat 2026 Publisher Playbook). Search Engine Journal reports the playbook’s year-on-year drop as 40.2%, after 21.9% the year before.
• Reuters Institute, January 2026, also with Chartbeat data from over 2,500 sites: Google organic search traffic fell 33% globally and 38% in the U.S. between November 2024 and November 2025. The authors add that “it is not clear how much of this is down to AI overviews” (Trends and Predictions 2026).

Google disputes the framing. In August 2025, Search chief Liz Reid wrote that “total organic click volume from Google Search to websites has been relatively stable year-over-year”, and that Google sends “slightly more quality clicks”, meaning visits where people don’t quickly click back. She called reports of dramatic declines “often based on flawed methodologies”. The post gave no figures. On 15 October 2026, Google announced more links, placed higher, inside AI answers. It said use of Preferred Sources, a feature that lets you choose outlets you want to see more of, grew more than sevenfold this year. Again, no click data.

The sharpest number comes from the European Publishers Council. Its complaint to the European Commission says “fewer than 5 percent of queries” in links-light interfaces like AI Mode lead to a click to a website. That is a complainant’s figure, based on evidence that is not public. I could not check it.

Total audiences have held up better than search. In Chartbeat’s network, direct visits rose from 13.5% to 15.9% of pageviews over two years, and links shared in private messages from 7.1% to 11.3%. Pageviews from loyal readers stayed at about 15 billion a month.

Forums: quoted, not visited

Reddit is the forum case. Pew found that Wikipedia, YouTube and Reddit were the most cited sources in Google’s AI summaries. Yet Reddit says its search referrals fell by more than one million per week on average in October. Huffman’s verdict, as reported by Engadget and The Verge: “It used to be a traffic driver, now it’s not.” Reddit’s answer is a login wall and tougher licensing.

There is a twist. Google’s 2025 post named forums as winners: people are “increasingly seeking out and clicking on sites with forums, videos, podcasts”. Reddit’s numbers suggest that being cited and being visited are drifting apart, even for the kind of content Google says it values. That is Reddit’s reading. I found no public response from Google to Huffman’s remark.

Shops: the sale without the visit

For online shops the risk looks different. AI Mode does not only summarize reviews. It is learning to sell. On the call, Schindler said Google’s Universal Commerce Protocol, a technical standard that lets shoppers check out directly on Google, “enables direct checkout for hundreds of thousands of brands across Google, including Chewy, Nike, Tapestry”. Google also launched a Universal Cart, which it says “allows retailers to maintain their relationships with customers.”

Google adds that sponsored product listings in AI Mode already get clicked about as often as unpaid ones. That claim rests on Google’s internal U.S. data for 20 August to 3 September 2026.

My reading: for a shop, a sale inside Google beats no sale. But every step that happens on Google’s page is a step where the shop does not see the customer. No browsing, no newsletter sign-up, no second product. The question shifts from “do I get the click?” to “do I keep the customer?” Amazon chose to block AI shopping agents over exactly that question, as covered in Amazon Blocks AI Shopping Agents, Walmart Lets Them In.

Opt-outs, complaints and licensing deals

Regulators have started to give websites a say.

• United Kingdom: On 3 June 2026, the Competition and Markets Authority required Google to give publishers effective tools to keep their content out of AI features in search, and to attribute content with clear links. Google has nine months to implement it. Google is testing a Search Console switch in the UK first and says it will not be used as a ranking signal for normal results. Its own warning: “Sites that opt out will not receive traffic or impressions from our generative AI features.”
• European Union: The European Commission opened an antitrust investigation on 9 December 2025. It examines whether Google uses publishers’ content for AI Overviews and AI Mode “without appropriate compensation” and without a way to refuse “without losing access to Google Search”. There is no decision yet. The European Publishers Council filed its complaint on 10 February 2026, Reuters reported. On 29 October 2026, five French groups, among them the magazine publishers’ union SEPM and the independent online press union Spiil, filed a joint complaint to feed French evidence into the case (FNPS).
• Licensing: Google says more than 400 publications now take part in its News AI pilot, which pays them “for the delivery and use of enhanced content” for new AI features. Google told Nieman Lab the program does not pay by how much a publisher’s content contributes to an AI answer. Reddit’s licensing deals with its two biggest partners are nearing the end of their terms.

One distinction matters here. The shared robots.txt signal against AI training that OpenAI, Google, Microsoft and Anthropic backed on 30 October covers training, not AI answers built from live web content. The details are in One Opt-Out From AI Training.

My reading: the old deal was content for clicks. The new deal is content for money, for those big enough to negotiate. A large outlet can sign a license. A small forum, a hobby blog or a niche shop mostly can’t.

What this means for companies

• Being cited is not being visited. Track AI visibility and real visits separately. Google’s Search Console is starting to show where pages appear in AI features.
• Make content an answer can’t replace. Google itself says in-depth reviews, original posts and first-hand analysis get clicked. Quick facts, definitions and schedules don’t.
• Build channels you control: newsletters, apps, direct visits, communities. In Chartbeat’s data these grew while search shrank.
• Decide on opt-outs deliberately. Opting out of AI features protects your content but, by Google’s own description, costs all traffic from those features. Test before you switch.
• Shops: look at the checkout layer. Check what product data you give Google, whether in-Google checkout fits you, and how you keep the customer relationship.
• Ads in AI answers come by default. Existing Search, Shopping and Performance Max campaigns can show there and are reported in aggregate, according to Search Engine Journal. Check your reports.
• Know your licensing position. Ask who uses your content for AI and on what terms. Small sites may have more weight through their associations.

What this means for users

• More answers, fewer clicks. That is convenient for quick questions. For health, money or legal matters, open the source before you act.
• Use the links. Inline links in AI answers show where a sentence comes from. If you can’t check a source, treat the answer with care.
• Watch for “Sponsored”. Ads now appear inside AI answers and follow-up questions in more countries. Google says they are labeled.
• Pick your sources. Preferred Sources lets you see more from outlets you trust.
• The free web runs on visits. Forums, guides and local news live on readers. If you value one, visit it, subscribe or sign up for its newsletter.

Honest limits

• Google gave no size for the AI Mode effect on revenue and no figure for clicks to websites in the third quarter.
• Pew’s data is from March 2025, before AI Mode was widely available. Chartbeat’s network leans toward news and media, and Chartbeat sells analytics to publishers.
• Neither Chartbeat nor the Reuters Institute can say how much of the decline comes from AI answers rather than other changes, such as Google Discover or ranking updates.
• Huffman’s statement is his own reading, and Reddit’s numbers are self-reported.
• The “fewer than 5 percent” figure comes from a complaint; the evidence behind it is not public.
• The call quotes come from Alphabet’s transcript, which Alphabet provides “for the convenience of investors only”; the webcast is the official record.
• Market moves are reported facts at the stated times, not a forecast and not investment advice.

Sources

• Alphabet: Q3 2026 results release, 28 Oct 2026; Q3 2026 earnings call transcript, 28 Oct 2026; Form 10-Q, filed 29 Oct 2026; Q2 2026 call transcript, 22 Jul 2026
• Google: Q3 2026 remarks from our CEO, 28 Oct 2026; More ways to connect with the web from Search, 15 Oct 2026; News AI pilot update, 15 Oct 2026; New opportunities, control and insights for website owners, 3 Jun 2026, updated 31 Aug 2026; AI in Search is driving more queries and higher quality clicks, 6 Aug 2025
• Pew Research Center: Google users are less likely to click on links when an AI summary appears, 22 Jul 2025
• Chartbeat: The 2026 Publisher Playbook, September 2026; Search Engine Journal: Google Search decline steepened to 40% for publishers, 24 Sep 2026
• Reuters Institute: Journalism, media, and technology trends and predictions 2026, January 2026
• Reddit: Q3 2026 shareholder letter, 29 Oct 2026; Engadget: Reddit will force users to log in as AI is killing search traffic, 29 Oct 2026; The Verge: Reddit’s CEO says Google’s AI Mode “does not drive traffic”, 29 Oct 2026
• UK Competition and Markets Authority: CMA secures fairer deal for publishers, 3 Jun 2026
• European Commission: Commission opens investigation into possible anticompetitive conduct by Google in the use of online content for AI purposes, 9 Dec 2025
• European Publishers Council: complaint executive summary; Reuters via Yahoo Finance: European publishers file EU complaint, 10 Feb 2026
• FNPS: statement on the French publishers’ complaint, 30 Oct 2026 (in French)
• Nieman Lab: Google’s News AI pilot expands to over 400 publications, Oct 2026
• Search Engine Journal: Google says lower AI Mode monetization weighed on search growth, 28 Oct 2026
• CNBC: Alphabet tanks nearly 13% for worst day ever and Alphabet earnings miss reflects first real sign that AI is taking a bite out of search, 29 Oct 2026
• Fortune: Alphabet just had its worst day as a public company, 29 Oct 2026; Yahoo Finance: Alphabet loses $475 billion in market value, 29 Oct 2026

Researched and drafted with AI assistance, including Anthropic’s Claude.