Reddit shares drop as Huffman flags Google AI traffic hit
CEO Steve Huffman tied a weekly loss of more than one million Google search visits through October to AI Overviews and AI Mode, while Reddit cut its fourth-quarter sales outlook.
Reddit shares fell more than 15% after earnings and as deep as about 25% to 30% in the sell-off.
CEO Steve Huffman blamed Google’s AI Overviews and AI Mode for a sharp drop in search referral traffic.
Google search referrals were falling by more than 1 million visits a week through October, Reddit said.
Fourth-quarter sales were guided at $1 billion to $1.03 billion, below the $1.05 billion Wall Street expected.
Reddit will test requiring user logins in selected markets outside the United States in the fourth quarter.