Google hasn’t figured out how to make AI pay like its search engine
Search queries are growing at their fastest rate in five years, Google parent Alphabet said in its earnings report last week. However, Google's Search revenue growth slowed to 12 percent year over year in the third quarter, down from roughly 17 percent in the previous quarter. Me
Google's struggle to monetize AI is a pressing concern for the tech giant, as it faces increasing pressure to demonstrate a clear path to profitability from its AI investments. Despite the growth in search queries, the slowdown in search revenue growth is a worrying sign, especially as AI-powered search capabilities are still in the early stages of development.
The challenge for Google is to replicate the success of its search engine, which has become a cash cow for the company, with AI-powered services. The search engine's advertising model has been incredibly lucrative, but it's unclear whether a similar model can be applied to AI services. As the AI landscape continues to evolve, Google will need to experiment with new business models and revenue streams to justify its significant investments in AI research and development.
What's next to watch is how Google plans to address the monetization gap between its search engine and AI services. The company will likely continue to invest heavily in AI, but investors will be looking for signs of a clear strategy for generating revenue from these investments. As the AI industry continues to mature, companies like Google, Microsoft, and Amazon will need to demonstrate a strong return on investment from their AI initiatives, or risk facing increased scrutiny from investors and competitors alike.
Originally reported by theverge.com. IPNews adds analysis for ai & agent economy readers.