The News
Reddit told shareholders on October 29 that search referrals fell by about a million a week in October, and that it is "shifting Reddit to a logged-in-only experience," per Engadget. The first tests come in select markets outside the US. Steve Huffman, Reddit's chief executive, blamed Google on the earnings call: "AI Mode does not drive traffic. Not for us, and not to anybody, as far as I know," per The Next Web. Reddit's shares fell about 18% after hours.
The View
Think about what Reddit is admitting here. For twenty years the deal between Google and the open web was simple. You let the crawler read everything, and it sends you visitors. Reddit, of all sites, just said the second half of that deal is breaking.
I should say I'm not neutral. I run a few small sites that live on search traffic, and this one gets a rounding error of it. So when the biggest pile of human conversation on the internet says the visitors stopped coming, I pay attention.
Here's the odd part. Reddit also sells its data to Google for AI training, reportedly around $60 million a year. So Google pays Reddit about $60 million to read the site, then answers the question in its own box, and the person never clicks through. Reddit's own numbers say logged-in and app users bring in more than 80% of its revenue, which means the logged-out visitor from search was never worth much per head. A million lost referrals a week is about 52 million a year. Apparently that's still enough to move the stock 18%.
So the login wall makes sense for Reddit. It gets better ad signals and it protects the data it sells. I'd do the same in that seat.
What worries me is what it does to everyone downstream. Reddit threads have been the honest answer to half the questions people ask a search engine. "Best dishwasher reddit" exists because the rest of the results got so bad. If those threads go behind a login, the search results get worse, which sends more people to the AI box, which sends fewer people to everybody else. That's a loop. And the AI box was trained on those same threads.
Is there a version of this where the small sites come out fine? Maybe. The AI assistants do read us. Earlier this month our server logs showed their crawlers fetching our new articles while Googlebot skipped them. But a crawler reading your page isn't a reader. Nobody has shown me an ad to a crawler yet.
I don't have a fix for this. Neither does Huffman, apparently, since he's still working out where to put the login prompt. His phrase was "we need to find the right boundary." Every publisher on the web is working on the same boundary right now.
If Google's next quarter shows search revenue up again while publishers' referrals fall, somebody in Washington is going to start asking who the web is for.
Room for Disagreement
Google would say AI answers are what people want, and that it still sends billions of clicks. Reddit is also not a victim. It chose to license its users' posts, and logged-out readers may simply come back through the app. A login wall could turn out to be a fine business decision and a small event for the web. I'd like to be wrong about the loop.
Bottom Line
If your business depends on search traffic, measure how much of it you have left every month, and start building one channel Google doesn't control this quarter: a newsletter, an app, or a login of your own.
— Hank