Reddit CEO Says Google AI Mode Does Not Drive Traffic as Reddit Plans a Login Wall

Reddit is the site Google leans on when it wants a human answer. On Thursday, its CEO said that arrangement has stopped paying off for Reddit.

On the company's third-quarter earnings call, Steve Huffman said search traffic in October "dropped by more than 1 million referrals on average per week." He blamed Google's AI Overviews and AI Mode, bluntly.

"The reality is the AI Mode does not drive traffic, not for us and not to anybody as far as I know. So it's just a fundamental shift in how Google works. It used to be a traffic driver. Now it's not." Steve Huffman, Reddit CEO

That is Huffman's read of Reddit's own numbers, and the "as far as I know" matters. He is not publishing a study of the open web. But the claim lands in the middle of a fight publishers are having with Google. Google itself said a day earlier it was seeing "lower monetization" in AI Mode ads, The Verge reported.

Huffman says demand has not moved. Reddit is still "a top search term in Google," he said, and Google is "crawling us as hard as ever." In his telling, people still want Reddit. Google just is not sending them there. AI Overviews and AI Mode, he said, went from "a feature" to "the full search experience," and at a minimum push "everyone down the search page."

He was careful on one point. A second factor, he said, is that Reddit believes its machine-translated pages are being ranked lower, which would hit it mostly outside the US. He also admitted Reddit has no visibility into whether this is a routine algorithm change.

The cost, and the pivot to logins

The numbers are what make this more than a complaint. Reddit still posted $895 million in revenue, up 53%, and 130.3 million daily active uniques. But Huffman said that if the October rate of decline continues, "total DAUqs could fall in Q4 by a low double-digit percentage" from that base of about 130 million. That is a conditional warning, not a forecast. He stressed that logged-in and app users, who bring in over 80% of monetization, grew sequentially.

Reddit's answer is to stop depending on Google at all. The company introduced a "For You" feed this week and wants Reddit to be a "direct, sticky, daily destination." It also plans to move to a mostly logged-in-only experience. Testing starts in select markets outside the US in the fourth quarter, and Huffman was clear about the intent: "This is a test, but we are going to make this transition."

He gave four reasons, including better ad targeting and easier compliance with new regulations. The one with teeth is data protection. "The vast majority of the scraping and stealing of Reddit happens in our logged-out user base," he said, and asked whether the change would make Reddit harder to scrape, he answered "For sure." He conceded the trade-off too: "we will likely be trading reach for engagement."

There is irony here. An analyst noted on the call that Reddit already licenses content to Google and OpenAI, and Huffman said talks continue, with any deal needing to be "a fair exchange of value." Reddit content feeds the AI answers now keeping readers off its pages. A login wall decides who reads it for free.

"Google is teaching people that if you want to come to Reddit, you need to come to Reddit." Steve Huffman, Reddit CEO

Huffman casts the traffic loss as a nudge toward Reddit's own app, which is spin worth treating as such. A company losing a million-plus search referrals a week and responding by raising a barrier to entry is making a bet. Huffman himself said the conversion rate over time is something "we just don't know."

Publishers will read this as a warning. If a site Google still ranks as a top search term cannot count on AI search for visitors, smaller sites have little reason to. Alphabet already had a rough week, as we reported when its AI spending rattled investors. The full call is in the Motley Fool transcript.