Reddit Google search traffic worries rise as AI Overviews expand
Steve Huffman told CNBC that Google’s AI summaries have not replaced the value publishers got from traditional search links.
By Jordan Bell · Startups & Deals Reporter
· 3 min read
Reddit Google search traffic is under fresh scrutiny after CEO Steve Huffman said Google’s AI Overviews have not yet delivered the same benefit that traditional search links have provided to websites. For investors, the issue is whether Reddit can keep turning search visitors into users if Google answers more queries directly on its own results page.
Huffman told CNBC on Thursday, alongside Reddit’s quarterly earnings report, that search traffic has become harder to read as Google rolls out more artificial intelligence summaries. AI Overviews are Google-generated answers that appear on some search results pages, often above the familiar list of website links.
Reddit has long gained users from Google search referrals, according to CNBC. When someone searches a question and clicks a Reddit result, that visit can become an app install, a logged-in user or an ad impression. If Google shows more of the answer before a user clicks, fewer people may land on the original site.
How do Google AI Overviews affect Reddit?
Huffman said Google’s older search format, often described as “10 blue links,” created value across the internet because it sent people out to publishers, forums and other websites. He told CNBC that AI Overviews have not yet shown a comparable positive effect for the wider web.
“Search is volatile, and we see those changes, we’ve been through those many times,” Huffman told CNBC.
The comments landed even though Reddit’s latest results were stronger than Wall Street expected. CNBC reported that the company beat estimates for second-quarter revenue and earnings and gave a forecast above expectations. Reddit shares still fell 11% in extended trading, reflecting investor concern about how Google’s search changes could affect future user growth.
Google did not respond to CNBC’s request for comment.
Reddit’s ad business is still growing
Reddit’s advertising revenue rose 61% in the quarter, CNBC reported, marking its eighth straight quarter of growth above 60%. The company has benefited from product improvements, growth outside the U.S. and a larger user base.
Reddit also makes money from data licensing deals with companies including OpenAI and Google, which use Reddit content to help train AI models. CNBC reported that Reddit’s “other revenue,” the category that includes that business, climbed 24% from a year earlier to $43 million.
The Wall Street Journal reported earlier in July that Reddit had considered limiting Google’s access to its data as publishers including USA Today and Politico raised concerns about lower search-referral traffic. Huffman told CNBC that Reddit’s position had not changed and that the company is still seeking an arrangement that benefits both sides while Google changes its products.
Huffman said Reddit is also working to make more of its web traffic become direct traffic, meaning users come straight to Reddit rather than arriving through another site. Direct visits can be more valuable because they give Reddit a stronger relationship with the user and less dependence on search algorithms.
On costs, Huffman contrasted Reddit with larger AI spenders such as Meta. He told CNBC that Reddit’s capital expenditures were about $1.1 million in the latest quarter and described the company as a low-spending business trying to get AI benefits without carrying the same AI infrastructure bill.
Huffman said the product challenge is also about what users want from Reddit. He told CNBC that people often come to the platform for human viewpoints, multiple perspectives and lived experience, rather than a machine-written summary of those discussions.
This story draws on original reporting from CNBC.
