Google has a pitch for advertisers worried that AI agents will make Search obsolete: Let bots do the shopping, but leave people to compare brands, prices, perks — and sponsored offers.
“When users shop, and that’s important, there’s a part of the journey that they don’t like, the grunt work, which is really good to automate with AI,” said Philipp Schindler, head of Google’s business, on Alphabet’s earnings call on Tuesday. “But we also want to improve, not just automate the discovery experience that people love in many cases.”
He said users don’t always want the cheapest option; they also consider brand loyalty and customer service. Google believes that this decision-making process leaves room for building advertising into agent spending.
He shared a possible example: “This is an insurance product that we found, and there are other strong options, one of which is a higher premium, maybe it can be reduced, and now they are offering a special discount.”
Schindler added that there is almost no perfect solution for shopping decisions, which makes Google “convinced” that there is a place for advertising even in agent search.
The comments provide a clearer explanation of Google’s business model for agent search, which poses a challenge to its core advertising business. On Tuesday, the company said that Google AI mode has led to search more than ever, but does not make money at the same level. This is a major concern among investors, who have long argued that chatbots and AI agents will threaten Google’s search business.
Google has been signaling for months that it wants to solve the problem without just uploading old-style ads to chatbots. Last quarter, Google said it was testing ideas like showing deals while planning a trip and marking sponsored links clearly in AI-generated listings.
Alphabet reported third-quarter revenue of $127.58 billion, less than the $127.97 billion analysts expected. Earnings per share came in at $2.12, compared to the roughly $3.01 expected, largely due to an $8.2 billion unrealized loss on SpaceX’s investment. Shares fell about 10% after hours.