Traditional search still brings Google more revenue than AI services
And the company's shares have already dropped by 10% because of this
Google's search business has faced the primary pressure of the AI era. For the third quarter results, the company recorded the highest growth in search queries in the last five years and a 12% increase in search revenue. However, the final earnings fell short of Wall Street's forecasts, causing the company's shares to drop by nearly 10% in after-hours trading.
Google's Business Director, Philipp Schindler, acknowledged that the strong growth in AI queries has reduced overall profitability, although the company is already actively testing the integration of advertising into AI search results.
Investors fear that neural networks and chatbots like ChatGPT will ultimately overshadow traditional search. Google CEO Sundar Pichai compared the current situation to the earlier transition to smartphones, emphasizing that the priority now is user convenience, with monetization expansion to follow.
