Reddit Warns Google AI Overviews Hurt Traffic as Shares Drop 11% Despite Strong Quarter
Updated
Updated · CNBC · Jul 30
Reddit Warns Google AI Overviews Hurt Traffic as Shares Drop 11% Despite Strong Quarter
2 articles · Updated · CNBC · Jul 30
Summary
Google’s AI Overviews are cutting into Reddit’s search referrals, Steve Huffman said, arguing the shift away from traditional blue links is undermining the web’s traffic-sharing economics.
11% extended-hours share drop followed even as Reddit beat quarterly estimates and issued a stronger forecast, showing investor concern that Google’s search changes could outweigh current operating momentum.
61% ad-revenue growth marked Reddit’s eighth straight quarter above 60%, while “other revenue” — including data licensing — rose 24% to $43 million.
Reddit is responding by pushing product updates and retention to turn web visitors into direct users, while Huffman said the company is still weighing its options on Google data access.
About $1.1 million in quarterly capex highlights Reddit’s lower-cost AI approach, as Huffman argued users still want human perspectives from Reddit rather than AI-generated summaries of them.