Down $13+ (about 4%) after hours, and the drop was apparently after they mentioned the search revenue miss on the earnings call because it was flat when I looked an hour ago. So not entirely priced in.

IIRC there was a search revenue miss last quarter too. Likely because of AI cannibalization of search results. Classic search is very heavily monetized, and a monopoly ad market. AI mode is currently lightly monetized, and a much more segmented market, and one that is harder to target ads for. Plus there are easily half a dozen LLM vendors now, while Search was a clear monopoly.

This is something investors should be very concerned about. It's not at all clear that whatever comes post-Gemini will be nearly as profitable as Search has been for the last 20 years.