Reddit CEO says Google's AI Overviews can't replace '10 blue links' for referral traffic
Reddit CEO Steve Huffman said his company has to find ways to work around changes at Google, which is delivering less traffic than in the past.
Google's AI-powered summaries, known as AI Overviews, are diminishing the referral traffic that websites like Reddit once relied upon, according to Reddit CEO Steve Huffman. In an interview coinciding with Reddit's quarterly earnings report, Huffman expressed uncertainty about search-derived traffic due to Google's AI offering. The company historically benefited from referral traffic provided by Google search, which helped Reddit attract users.
However, Google's AI Overviews have pushed blue links further down on search results pages, altering the economics of the internet. Reddit reported strong revenue and earnings for the second quarter, surpassing estimates, yet the stock dropped 11% in extended trading, reflecting Wall Street's concerns about the impact of Google's changes.
Huffman emphasized that the 10 blue links have historically driven significant value for the entire ecosystem, while AI Overviews have yet to make a comparable positive impact. Despite Reddit's robust ad revenue growth, Huffman stated that the company is exploring alternative ways to acquire users, such as focusing on product updates and user retention, while avoiding the high costs associated with AI development.
Written by urgent.news from CNBC Technology's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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