Reddit questions AI Overviews trade-off as search referrals turn choppy

New Delhi: Reddit is looking for a more balanced arrangement with Google as AI Overviews increasingly use material from online communities to answer queries without requiring users to visit the original discussion. Speaking during Reddit’s second-quarter earnings call, Chief Executive Officer Steve Huffman said the companies were “still looking for that win-win” as they worked through how Reddit’s content appears across Google’s artificial intelligence products. Reddit’s archive of product advice, personal experiences and unfiltered discussion makes it valuable to AI-powered search. At the same time, an answer assembled directly on Google can remove the need to open the Reddit threads from which that information was drawn. Reddit stopped short of attributing its second-quarter traffic fluctuations directly to AI Overviews. It did, however, acknowledge that traffic from search engines had become less predictable. “Search referrals were choppy in the quarter, and traffic was more volatile later in the quarter,” Huffman said in the company’s shareholder letter. He added that Reddit had limited visibility into referral traffic and did not intend to build its long-term growth around occasional visitors arriving from search. “We’re not building for drive-by traffic. We’re building a daily destination,” Huffman said. The two companies expanded their partnership in February 2024, giving Google access to Reddit’s Data API and, with it, a structured stream of public posts and comments. Reddit said the arrangement enabled Google to improve its products, develop new ways of displaying Reddit discussions and train models more efficiently. Google said at the time that access to Reddit’s API would provide fresher information and stronger signals to help it understand, display and train on content from the platform. The partnership was also expected to make Reddit discussions easier to find across Google products. AI Overviews complicate that promise. Unlike conventional search results, which direct people towards a list of websites, the feature draws information together and presents a generated response at the top of the page. Google maintains that its AI search products are expanding, rather than shrinking, the wider search ecosystem. During Alphabet’s latest earnings call, CEO Sundar Pichai said AI Overviews and AI Mode were increasing search activity and that Google was sending billions of visits to websites each week through its AI-powered search features. For Reddit, the question is not simply whether Google sends traffic. It is whether the traffic, attribution and commercial value returned to Reddit remain proportionate to the value its communities provide to Google’s answers. The platform’s own description of its place in the AI economy is built around that distinction. Huffman told shareholders that AI reduces large parts of the internet to summaries, while Reddit offers arguments, context and first-hand experience. “As AI makes information more abundant, the challenge is no longer finding content—it’s finding context, personal opinion, and first-hand accounts,” he said. The traffic concerns emerged during an otherwise strong quarter for the company. Reddit’s revenue increased 61% year on year to $805 million, while advertising revenue rose 64% to $762 million. Net income more than doubled to $253 million. Global daily active uniques increased 18% to 130.3 million, although growth was considerably stronger internationally than in the US. International daily users rose 28%, compared with 6% growth in the US.