Google’s ad network has begun showing advertising within the flow of conversations with chatbots — part of Alphabet Inc.’s broader strategy to maintain its dominance in digital advertising amid the rapid rise of generative artificial intelligence.
Earlier this year, Google AdSense, which traditionally displays ads in search results and web margins, expanded to include conversations with AI chatbots run by startups. According to sources familiar with the matter, Google conducted tests last year and early this year with AI search apps such as iAsk and Liner.
Search Revenue Under Threat as AI Rivals Emerge
Showing ads alongside its own search results remains at the core of Google’s business, supported by a vast advertising operation across much of the web. However, this empire faces new threats from companies like OpenAI and Perplexity AI, which aim to draw users away by offering faster ways to find information using generative AI.
“Feedback loops are incredibly important,” said Tomasz Tunguz, a general partner at Theory Ventures. “Having greater visibility into what’s working is essential to success.”
A Google spokesperson confirmed that “AdSense for Search is available for websites that want to show relevant ads in their conversational AI experiences.” Startups iAsk and Liner declined to comment on their relationship with Google.
Legal Pressure Builds as Google’s Ad Power Grows
Regulators are taking a closer look at Google’s influence over the online advertising economy. In 2024, Google Search generated over $198 billion in revenue, accounting for almost 60% of Alphabet’s annual sales. In April, a federal judge found Google in violation of antitrust laws in advertising exchanges and ad-serving tools markets.
Google argues its dominance is due to the effectiveness and ease of its tools. Now, with new partnerships with startups, the company is seeking to generate revenue even if its share of the search market shrinks. Running these experiments with AI startups allows Google to explore ad monetization in AI chat environments.
Startups Seek Ads to Offset High AI Costs
Generative AI startups are turning to advertising models to manage the costs of serving AI-generated answers to users.
For example, iAsk shows ads below its AI responses before inviting follow-up questions. Startups such as Koah Labs have also enabled brands to serve ads to chatbot users.
Perplexity AI, a leading AI search startup, establishes direct relationships with brands that want to advertise, according to a source. Perplexity allows brands to sponsor follow-up questions users ask after receiving AI responses.
Tailored Ads Aim to Mimic Early Google Search Monetization
Liner, a tool popular with students and researchers, keeps its AI service accessible by displaying a select number of tailored ads based on user searches.
“People using generative AI tend to click on fewer links — which may pose challenges for startups seeking to make money through online advertising,” the article notes. However, Liner users, who frequently visit the site for research purposes, are more likely to click on links, allowing for more targeted advertising.
With its advertising strategy, Liner CEO Luke Jinu Kim said the company is aiming to build “a very early version of Google search ads,” and added that he hopes to show a small number of highly relevant ads based on user queries.
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