There was a time when you would type a question into Google, add the “reddit” tag to the end, and almost always a thread would appear with an answer to your problem that someone who had already gone through the same thing and solved it. Reddit’s CEO announced that the shortcut will be discontinued from now on. If you want to get information from Reddit, you need to enter and log in with your username.
The root of the problem is an old familiar one: Google’s AI essence. Search engines no longer send users to threads like they used to, so Reddit decided to put a door on its social network. Its CEO, Steve Huffman, said in an interview for Axios that he resisted the move because of his belief in the open web. “For me, whose life has been defined by the Internet, this is a big change. But I’ve come to the conclusion that it’s the right decision for our platform and our business,” Huffman said in a statement posted on Reddit.
One million fewer visits per week. Last Thursday, Reddit presented its third-quarter results and issued a warning in its letter to shareholders. In October, traffic from the search engine dropped by “an average of more than a million references per week”. If the pace of decline continues over time, daily users could decline by double-digit percentages in the fourth quarter.
The social network’s daily active users in the US fell from 53.2 million in the second quarter to 50.7 million in the third quarter, down 2% from a year ago. This is the first fall since its IPO and as such, it has collected ReutersSince this information was known, Reddit shares have sunk 18% after the close.
Reddit Daily Active Users Source: Reddit
Google tracks the same, but does not send visits. Huffman put a name and designation to the problem in his call with investors. “Google continues to track us with the same intensity as always, so the demand hasn’t changed from their perspective.” And he added that “the reality is that AI mods don’t generate traffic, not for us or anyone, as far as I know.”
For Huffman, the main change is the way the search engine itself works. “It used to generate traffic, now it doesn’t,” he said. The Verge. And he made it clear that Reddit content is highly sought after. “People still want to use Reddit. It simply indicates that Google no longer directs them to Reddit like it used to,” highlighting that the problem was not in the content of his thread, but in the way users accessed it. A Pew Research Center study of users’ clicking habits on Google AI summaries confirms Huffman’s words: with AI summaries, information sources are clicked on in only 8% of visits. 15% with traditional Google search.
Reddit’s daily user growth in the US fell for the first time since its IPO. Source: Reuters
Media is the life of the same movie. The scenario Reddit is facing is not new. The editorial media has suffered the same story since Google applied its AI mode to search. A user who makes a search no longer visits the same sources of information, and fewer clicks mean fewer ads and less revenue with them. Penske Media, publisher of Rolling Stone and Variety, sued Google over AI summary. Google responded that it sends “billions of clicks” to websites across the web every day.
However, the Reddit case has an additional twist: Google is paying Reddit about $60 million a year to train its AI models with forum threads. That is, AI that feeds on content like yours is now driving down your visits and driving down your ad revenue.
A door with an account. The response of many editorial media was to put their content behind paywalls. Reddit’s approach has placed a middle door in the form of free user registration. Users with a session and app users already account for over 80% of monetization But of the quarter’s 130.3 million daily users, 76.8 million were not logged in.
Huffman defended the change with a business rationale: “When users log in, they spend more time on Reddit, and that way we can better understand their interests and, therefore, better segment ads,” he said. Axios. Testing of the new registration-based usage system will begin in markets outside the US this quarter. In his statement on Reddit, Huffman recalled that “virtually all major ad-based platforms have gone through this transition.” His five-year goal, Huffman said, is for Reddit to be “more Reddit.”
In Xataka | Reddit was one of the last corners of the Internet free of fuel. Now it is starting to show alarming signs.
Picture | Flickr (Web Summit), Magnificent
