Reddit CEO Comments on Decline in Google Search Referrals
Reddit's stock fell after its CEO noted a decline in traffic from Google search referrals during the second quarter, prompting concerns about user engagement and platform visibility. Steve Huffman emphasized that while referral traffic was 'choppy,' the company is shifting focus to direct app usage as users increasingly engage with Reddit through its own application rather than via external links. Despite strong financial results—including revenue of $804.9 million and earnings per share of $1.25—Reddit's shares dropped in extended trading due to worries over search traffic volatility. The CEO criticized Google’s AI Overviews for not delivering the same value as traditional search results, highlighting ongoing challenges within the evolving digital ecosystem. Analysts noted a significant disconnect between Reddit's strong financial performance and its stock price reaction. The company reported 18% year-over-year growth in daily active users and raised third-quarter revenue guidance to $860–$875 million.
Topics: AI Overviews CEO commentary Google Search Reddit traffic volatility