Google AI reshapes search, cutting Reddit shares and open access
Reddit shares fell 15% on weak guidance and plans to require user login as Google AI cuts search traffic.
Reddit beat earnings expectations in the third quarter but issued weak guidance for the fourth quarter, causing shares to fall over 15%. CEO Steve Huffman told CNBC that search referral traffic from Google has declined significantly due to the tech giant's shift to AI overviews.
In response, Reddit plans to require all users to create official accounts to access the platform, a major departure from its long-standing open access model. The company will begin testing the login requirement in the fourth quarter outside the US.
Huffman said the company's AI efforts represent a fundamental shift in how the Google product works. Reddit remains in negotiations with Google over its data-licensing agreement.
The company's Q4 sales guidance of 1 billion to 1.03 billion dollars fell short of Wall Street estimates of 1.05 billion dollars.
- 15%
- Share decline
- 1 billion to 1.03 billion dollars
- Q4 guidance
- 1.05 billion dollars
- Wall Street estimate
Why it mattersThis shows how changes to Google search directly reshape business models across the internet, and signals that open, anonymous internet browsing may be ending.
AustraliaAustralian Reddit users may soon need to register to view the platform. The shift reflects wider changes in how people find information online as AI takes over from traditional search.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
