💸 Reddit fed the hand that's now eating it
Reddit's model was simple: someone Googles a question, a Reddit thread appears, they click through, they see ads. Google's AI Overviews broke that chain — the answer now lives inside the search page, and the click never comes.
CEO Steve Huffman told investors that Google referrals fell by over a million per week in October. If the trend holds, daily active users could drop by a low double-digit percentage from the current ~130 million base. The market responded: shares fell 30.44% in one session — 44% on the week — landing at $90.15.
The irony: in early 2024 Reddit sold Google access to its discussions for a reported $60M a year to train AI models. That content helped make Google's AI sharper. That sharper AI now keeps users on Google's page instead of Reddit's.
Reddit's model was simple: someone Googles a question, a Reddit thread appears, they click through, they see ads. Google's AI Overviews broke that chain — the answer now lives inside the search page, and the click never comes.
CEO Steve Huffman told investors that Google referrals fell by over a million per week in October. If the trend holds, daily active users could drop by a low double-digit percentage from the current ~130 million base. The market responded: shares fell 30.44% in one session — 44% on the week — landing at $90.15.
The irony: in early 2024 Reddit sold Google access to its discussions for a reported $60M a year to train AI models. That content helped make Google's AI sharper. That sharper AI now keeps users on Google's page instead of Reddit's.