Reddit Loses Visitors Due to New Google Search Features

Reddit CEO Steve Huffman cited Google's search AI features – AI Overviews and AI Mode – as the reason for the decline in visitors. In October, the platform lost over a million search referrals per week on average: these features provide answers directly in the results, leaving users with no reason to visit external sites. "Google is crawling us as actively as before, but AI Mode doesn't drive traffic – neither to us nor anyone else," Huffman stated. He also mentioned the demotion of machine-translated Reddit content as a second factor, which mainly affected audiences outside the US.

The daily audience in the US decreased by 2% year-on-year, to 50.7 million – the first decline since the company went public in 2024. The global audience grew by 12%, to 130.3 million, and revenue increased by 53%, to $895 million. Huffman warned: if search traffic continues to decline, the total number of visitors could decrease by 10% or more from the current 130 million in the fourth quarter. In pre-market trading, Reddit shares fell by 22%, from $129.6 to $101.

The company is preparing to transition to requiring authorization for access to most content: tests will begin in the fourth quarter in select countries outside the US, with no timeline for full launch announced. Authorized users and the app account for over 80% of monetization. Reddit's content is currently licensed by Google and OpenAI, but Huffman does not expect a return of search traffic: the focus is on direct visits.

Alphabet's report, published on October 28, caused Class A shares to plummet by 12.6% to $283.82 – the steepest drop since 2004; the market capitalization decreased by approximately $482 billion. Search revenue grew by 12% to $63.35 billion compared to 17% in the second quarter and 19% in the first, while analysts expected 15%. Philipp Schindler attributed the slowdown to currency fluctuations and the rapid growth of AI Mode, which currently generates less advertising revenue. Capital expenditures reached $51.4 billion, and free cash flow was minus $9.1 billion.