Alphabet said Search and Other advertising revenue grew 17% year over year in the second quarter while Google continued to expand AI Overviews and AI Mode. Google Cloud revenue rose 82%, which the company attributed to demand for AI infrastructure and services.

The results answer one immediate question: Google has not yet destroyed the economics of its core product by changing how search results are presented. They do not answer the more difficult question of who else gains or loses when an AI-generated response replaces a list of links.

A transition inside the money machine

Google is attempting a rare technology transition from a position of dominance. It must make Search feel conversational and agentic without weakening the advertising market that funds the product. It must also maintain enough connection to the web that users, merchants and publishers continue to supply the content and destinations Search depends on.

CEO Sundar Pichai said AI Mode had surpassed one billion monthly active users and was increasing query volume. He also said Google’s AI search features send billions of clicks to websites each week. Those are company claims; Alphabet did not provide a directly comparable breakdown of click-through rates before and after AI answers in the earnings remarks.

Revenue growth can coexist with lower traffic to particular sites. More queries, higher ad prices, better targeting or new commercial formats can support Google’s business even if publishers receive a smaller share of user attention.

The commercial map is still being redrawn

For marketers and retailers, AI search may create new points of influence. Product data, structured feeds, reviews and merchant relationships could matter more when the system assembles an answer rather than ranking ten links. The route from discovery to purchase may become shorter—and more controlled by the search platform.

Publishers face the opposite risk. If users can obtain a satisfactory answer without leaving Google, referral traffic and advertising revenue may decline even when their reporting informs the response. The long-term health of AI search therefore depends in part on whether it creates an economic reason for high-quality sources to keep producing material.

Alphabet’s quarter shows that the advertising engine can continue to grow during the early transition. “Not broken” is not the same as settled. The next signal will be whether Google can demonstrate durable value for the businesses and publishers on the other side of the result page, not only for its own shareholders.

Sources for editorial review

Drafting note: This draft was prepared with AI assistance from the linked source material and requires author review, independent fact-checking and final editorial approval before publication.