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Google and Reddit each reported pressures linked to changes in search: Google said AI Mode brings in less revenue than traditional search, while Reddit said its search traffic had fallen and warned daily users could decline. The reports point to a shared tension as AI changes how people find information online: platforms may keep more activity on their own services, while publishers and other sites receive less traffic.
Google and Reddit reported different but connected pressures on Thursday: Google said people’s increased use of AI Mode was weighing on search revenue growth, while Reddit said traffic from search had fallen and warned that its daily users could decline. The reports highlight how AI-driven search may change the financial relationship between platforms and the websites that have relied on search referrals.
On an earnings call, Google chief business officer Philipp Schindler said increased use of AI Mode was among the reasons search revenue growth had slowed despite rising query volume. The source report says advertisers generate less revenue from AI Mode than from traditional search, though it does not provide a separate revenue figure for the AI feature. Google Search and related advertising remained a large business: revenue rose 12 percent to $63.35 billion, slower than the growth rates reported for the first and second quarters.
Reddit reported that its search traffic had fallen meaningfully and said daily users might decline by a low double-digit percentage by the fourth quarter. CEO Steve Huffman said in a shareholder letter that Reddit would increasingly encourage visitors to log in. He said accounts provide more signals for ad targeting, are associated with higher engagement, and help Reddit protect access to its data and adapt to regulation.
The market reaction was sharp for both companies. Alphabet shares fell 12.6 percent, wiping out about $500 billion in market value, while Reddit shares fell 15 percent after its results. The source report linked much of Alphabet’s selloff to concern about the scale of its AI infrastructure spending: the company planned capital expenses of up to $205 billion this year and reported negative $9 billion in free cash flow. Those market moves do not by themselves establish the long-term effect of AI investments or search changes.
AI Search Tests the Referral Economy
The shared issue is not that Google and Reddit reported the same problem. It is that search is changing how value is distributed. Google can answer more questions within its own products, potentially keeping users there longer, but its disclosure suggests that at least one AI search experience currently earns less than conventional search. Websites such as Reddit, meanwhile, can lose visits when people arrive less often through search.
That matters to readers because the old arrangement supported a broad exchange: search engines sent people to websites, and those sites supplied content that helped make search useful. If AI answers reduce referrals while platforms retain user attention and data, publishers may have fewer opportunities to earn from advertising, subscriptions, or returning visitors. Reddit’s proposed login push is one example of a site trying to build a more direct relationship with its audience.
The reports do not prove that AI is the sole cause of either company’s results. They do, however, put pressure on claims that AI search will benefit the wider web simply by prompting more searches or deeper browsing. Revenue and referral effects are now part of the public debate, alongside the quality and usefulness of AI answers.
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How Search Links Led to Reddit
For years, Google search helped websites reach readers by indexing their pages and directing users to them. The source report describes Reddit as a major beneficiary after Google began surfacing forum discussions more prominently. Reddit’s human-written conversations became especially useful in search results as lower-quality online material spread. The report says Google reportedly agreed to pay $60 million a year to license Reddit data after Reddit restricted bots’ access to its forums.
Google has increasingly answered some queries directly on its results pages, first with features such as AI Overviews and then with the separate AI Mode interface. The report says Google executives had previously stated that AI Overviews monetized about as well as traditional search. Schindler’s comments about AI Mode concern a distinct product and suggest its economics may differ; the source does not establish that all AI search features perform the same way.
“It is better for our business because we will have more signals for ads targeting, and being logged-in leads to higher engagement generally.”
— Steve Huffman, Reddit CEO, in a shareholder letter
The Scale of Search Changes
The causes and durability of the reported changes remain unclear. The source does not quantify how much of Reddit’s traffic decline came from Google, AI search, or other factors, and it does not provide a precise forecast behind the warning of a low double-digit daily-user decline by the fourth quarter. It is also unclear how many visitors Reddit will require or persuade to log in, and how that policy will affect overall usage.
For Google, the reported comments do not give AI Mode’s standalone revenue, advertising rates, or profitability. The source also does not establish whether the feature’s monetization will improve as it develops. Alphabet’s stock decline reflects investor reaction to the company’s spending and outlook, not a definitive measure of the eventual returns from its AI investment.
Revenue and Traffic in Coming Quarters
The next evidence will come from subsequent company results: whether Google’s search revenue growth and AI-related costs change, and whether Reddit’s search referrals and daily users follow the trajectory it described. Reddit’s move toward more logged-in use will also show whether it can offset weaker search traffic through greater engagement and more useful advertising signals.
Until those results are reported, the central issue remains open: can AI search generate enough value for platforms while sustaining the traffic and revenue that outside websites depend on? The Thursday disclosures make that question more concrete, but do not settle it.
Key Questions
What do Google and Reddit have in common in these reports?
Both described pressure connected to changes in search. Google said AI Mode earns less than traditional search, while Reddit reported falling search traffic and warned daily users could decline.
Did Google say all of its AI search features earn less?
No. The reported comment concerned AI Mode. The source says Google executives had previously described AI Overviews as monetizing about as well as traditional search, and it does not show that all AI features have the same economics.
How much did Reddit say its daily users might decline?
Reddit said daily users might decline by a low double-digit percentage by the fourth quarter. The source does not provide a more exact figure or specify how much of the change it attributes to search traffic.
Why does Reddit want more visitors to log in?
CEO Steve Huffman said logged-in users provide more signals for ad targeting and generally show higher engagement. He also cited protecting access to Reddit’s data and adapting to regulations.
Do the reports prove AI search is harming the wider web?
No. They provide evidence of monetization and referral concerns at Google and Reddit, but do not establish that AI is the only cause or show the overall effect across the web.
Source: platformer.news
