Google outlines plan to keep shopping ads in AI search

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Google keeps ads in AI search

Highlights

Google's chief business officer Philipp Schindler states AI-powered agentic shopping will integrate ads into product discovery and decision-making processes without removing sponsored offers.
Alphabet reports third-quarter revenue of $127.58 billion, missing analyst expectations of $127.97 billion, and earnings per share at $2.12, impacted by an $8.2 billion unrealized loss on its SpaceX investment.
Shares drop about 10% after hours as investors question the monetization of increased AI-driven searches, despite higher search volumes and ongoing advertising integration efforts.

Advertising model for agentic shopping

As reported by Business Insider, Google's chief business officer Philipp Schindler says the company sees AI as a tool to automate the parts of shopping that users dislike, while preserving the product discovery process that can still support sponsored offers.

Speaking on Alphabet's earnings call on Tuesday, Schindler says shoppers do not always choose the cheapest option and often weigh factors such as brand loyalty and customer service. He says that creates an opening for Google to place ads into agentic shopping experiences rather than removing advertising from the process altogether.

Schindler gives an example in insurance, where an AI agent could present more than one policy and highlight differences such as premium levels, deductibles and a special discount. He says there is almost never a single perfect answer in a shopping decision, which makes Google confident advertising can remain relevant in agentic search.

Google has been signaling for months that it wants to adapt its ad model for AI products without simply inserting traditional ads into chatbot responses. Last quarter, the company says it was testing features such as offers during travel planning and clearly marked sponsored links inside AI-generated lists.

Investor pressure and earnings backdrop

Google's comments come as investors question whether AI chatbots and agents will weaken the economics of its core search business. The company says on Tuesday that AI mode is driving more searches than ever, but it is not monetizing those queries at the same rate.

Alphabet reports third-quarter revenue of $127.58 billion, slightly below analyst expectations of $127.97 billion. Earnings per share come in at $2.12, versus roughly $3.01 expected, largely because of an $8.2 billion unrealized loss on its SpaceX investment.

Shares fall about 10% after hours, underscoring market concern over how quickly Google can turn growing AI usage into ad revenue. The company is trying to reassure advertisers and investors that automation in shopping does not eliminate the commercial value of search, but changes where that value appears.

In our earlier article on a KPMG U.S. survey of CEOs, we covered how many large companies are seeing early efficiency and growth gains from AI agents, even if few leaders consider them truly transformational yet. The survey also highlighted continued investment in AI infrastructure alongside hiring and retraining plans, underscoring that organizations expect agentic systems to expand workloads and require new skills rather than simply replace jobs.

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