Is Google undermining its own business model?

Google has recently followed Bing’s lead by introducing AI-generated snippets at the top of its search results page. These snippets, created by Google’s AI called Gemini, provide answers to users’ queries by compiling information from various web pages. There are also references to the sources (weblinks) in the AI snippet. However, the full links to relevant web pages are pushed further down the page, especially on mobile devices, because the AI snippet occupies significant space.

Traditionally, Google’s business model has relied on selling space on its search results page. But what happens if this space is now predominantly filled with unpaid AI snippets?

There is already noticeable evidence of a significant decline in clicks on organic links. Although these links still receive impressions on Google, their reduced visibility means users are less likely to click on them. Moreover, the AI snippets often provide such comprehensive answers that users don’t need to click through to any related web resources, as they already have a satisfactory response. The result is that the CTR (click through rate) has gone done massively, while the impressions remain on more or less same level.

For Google, this likely means a decrease in clicks on paid links, which directly impacts its revenue.

It seems Google is in a transitional phase, adapting to the challenge AI presents to its long-standing practices. Rather than resisting, they are integrating AI into their services, which is a sensible approach.

I speculate that Google might eventually charge companies for having their content used to train the AI algorithm. If companies don’t pay, their content or brand may be excluded from consideration by the AI. Alternatively, Google could introduce sponsored options within the AI snippets. This presents a complex situation for Google and poses challenges for those involved in SEO.