Google · Decrypt
In February 2024, Reddit signed a reported $60 million-a-year data licensing deal with Google
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Those deals turned Reddit's enormous archive of human conversations into something it could sell to AI developers.
Key facts
- Revenue climbed 53% year over year to $895 million, advertising revenue increased 54% to $847 million, and net income reached $283 million
- Reddit's 50-day exponential moving average, a trend indicator that gives greater weight to recent prices, sits around $149.80, while its 200-day average is near $162.12
- At $90.15, Reddit would need to climb approximately 66%—almost 70%—to return to its 50-day average
- Reddit shares plunged 30.44% to $90.15 on Friday after CEO Steve Huffman warned that Google's AI-powered search features are cutting referral traffic and could shrink the platform's user base
Summary
CEO Steve Huffman said Google search referrals fell by more than 1 million per week in October and warned daily active users could decline by a low double-digit percentage in Q4 if the trend continues. Reddit shares plunged 30.44% to $90.15 on Friday after CEO Steve Huffman warned that Google's AI-powered search features are cutting referral traffic and could shrink the platform's user base. The selloff came after the company reported strong third-quarter results but issued a weaker-than-expected revenue forecast for the current quarter. Reddit built much of its business around people discovering its discussions through Google searches, and those visitors are increasingly finding answers without ever clicking through to the platform. Reddit's third-quarter numbers initially looked healthy.