Reddit search traffic slumps, will push visitor sign-ins to curb AI scraping

Reddit CEO Steve Huffman announced on Thursday plans to require user sign-ins for most content as the platform battles data scraping issues and a decline in search referral traffic. Huffman cautioned that daily active unique visitors (DAUq) could drop by a double-digit percentage in the fourth quarter from the current 130 million, if search traffic continues to fall.

Shares of the company dropped over 9 percent in extended trading. Search engine referrals to Reddit fell by more than one million weekly in October, with US DAUq decreasing 2 percent to 50.7 million. The US is Reddit's largest market by revenue. The company has filed lawsuits against OpenAI licensee Anthropic, Perplexity AI, and three data scraping firms, alleging unauthorized data collection.

Huffman emphasized that Reddit will continue licensing its data intentionally, but these deals include safeguards to protect users and the business. While Reddit's 53 percent revenue growth slowed sequentially in the September quarter, it still outperformed rivals like Snap and Pinterest in the competitive ad market. Huffman confirmed that the company is improving its platform for logged-in users, generating over 80 percent of revenue, by offering more tailored ads and incorporating features such as enhanced video content and better personalization.

The firm aims to test the logged-in-only experience in select international markets during the fourth quarter to evaluate its impact before a company-wide rollout.