DIGITAL LIFE

Google inserts abusive, intrusive ads into chatbot conversations with AI startups

Google’s ad network has begun showing ads in the flow of chatbot conversations — part of Alphabet Inc.’s efforts to maintain its edge in digital advertising as generative artificial intelligence takes off.

In early 2025, Google’s AdSense network, which traditionally displays ads in search results and on the margins of websites, expanded to include conversations with chatbots operated by AI startups. Google made the move after conducting tests last year and earlier this year with a handful of startups, including AI search apps iAsk and Liner, according to people familiar with the matter who asked not to be identified discussing private information.

Showing ads alongside its own search results is core to Google’s business, driven by a business that serves ads across much of the web. That empire is under threat as new entrants like OpenAI and Perplexity AI seek to woo the search giant’s audience with products aimed at helping users find what they’re looking for faster. As Google invests heavily to protect its lead, finding the best way to monetize generative AI will be crucial, said Tomasz Tunguz, a general partner at Theory Ventures. “Feedback loops are incredibly important,” Tunguz said. “Having greater visibility into what’s working” is essential to success. 

A Google spokesperson confirmed that “AdSense for Search is available to sites that want to display relevant ads within their conversational AI experiences.” Startups iAsk and Liner declined to comment on their relationship with Google. Regulators are increasingly scrutinizing Google’s influence over the advertising economy that underpins the open web. Google Search, a giant in the search industry, generated more than $198 billion in revenue in 2024, nearly 60% of Alphabet’s annual sales. 

In April, a federal judge found that the Alphabet unit violated antitrust law in the marketplaces for ad exchanges and tools used by websites to sell advertising space, known as ad servers. The company argues that it has a dominant position because its tools are effective and easy to use. Now, with its growing business relationships with startups, Google aims to profit even as its share of the search market declines. 

Experimenting with AI startups will allow the company to test the potential of advertising in the relatively new world of AI chat. Generative AI startups are increasingly exploring advertising-based business models to offset the high costs of answering user questions with artificial intelligence. For example, before inviting users to ask follow-up questions, iAsk displays ads below the AI-generated answers. In addition to Google, startups like Koah Labs have begun to let brands serve ads to the chatbot’s audience.

The AI ​​search startup Perplexity, one of the most prominent companies using AI to reshape the internet, has established relationships directly with brands that want to buy ads on its site, according to a person familiar with the matter. Perplexity allows brands to sponsor questions that follow on from users’ queries.

To keep its product accessible to students, a key target audience, Liner has focused on showing a select number of ads tailored to users’ searches.

People using generative AI tend to click fewer links — which could pose a challenge for startups looking to profit from online advertising, where brands typically pay per click. But Liner’s users who come to the site to search often click on links, and the longer queries allow for more targeted advertising, CEO Luke Jinu Kim said in an interview.

With its advertising, Liner is aiming to achieve something that is "more like an early version of Google search ads," Kim said, adding that he expects the site to display a small number of ads that are highly related to the query.

mundophone