How Google profits even as its AI summaries reduce website ad link clicks
Alphabet, Google’s parent company, is making money hand over fist. In its latest quarterly report, Google’s revenue grew 14 percent year-over-year to $96.4 billion. While Google’s cloud revenue, $13.6 billion, with 31 percent year-over-year growth, is growing fast, the bulk of its cash, $54.2 billion worth, still comes from advertising.
What I wonder, though, is whether, even as its quarterly ad revenue hit a new all-time high, this can possibly continue? You see, Google’s move to place AI-generated summaries, aka “AI Overviews,” at the top of search results is wreaking havoc on websites.
How bad is it? Bad.
Related Knowledge Center: State of the business model
The traditional journalism business model has long since collapsed, and news organizations have shrunk or disappeared entirely. While a number of promising experiments are under way, the public has not shown a willingness to buy what news organizations are selling.