Google to test ads in generative AI search results

Google will begin experimenting with advertising within search results powered by generative AI.

Alphabet Inc.'s Google will begin experimenting with advertising within search results powered by generative artificial intelligence, the tech giant announced on Tuesday, as it seeks to fend off rival Microsoft in the lucrative search ads market.

Over the past few months, Google and Microsoft have supercharged a race to change how people search for information by infusing their search engines with generative AI, which can provide conversational written responses to queries, process information online and surface relevant websites.

The AI capabilities will also alter how advertisers reach consumers through search engines, a market that is estimated to grow to $286 billion this year, according to research firm MAGNA.

For example, users can search "hiking backpacks for kids" on the new version of Google and the AI could respond with an ad for a particular backpack, along with tips for how to choose the best backpack for a child, Google said.

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"This is a new, simpler and helpful way to interact with Google search," said Jerry Dischler, vice president and general manager of ads, in an interview. "It's going to be a great opportunity to deliver a delightful user experience that will lead to new commercial opportunities in the future."

Google unveiled the new version of its search engine earlier this month, called Search Generative Experience, which will roll out over the coming weeks via a wait list.