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

San Francisco, California - Reddit CEO Steve Huffman announced plans on October 29 to require user sign-ins for most content as the platform faces challenges with data scraping and a drop in search referral traffic. The company currently has approximately 130 million daily active unique visitors, and Huffman predicts a potential decline of double-digits in Q4 if search referrals further decrease.

Search engine referrals to Reddit dwindled by over a million weekly in October, he reported. In the US, its primary revenue-generating market, DAUq decreased by 2% to 50.7 million. Reddit, which licenses its data to AI companies like OpenAI and Google, has filed lawsuits against Anthropic, Perplexity AI, and data scraping firms for allegedly unlawfully acquiring its data.

While Reddit's trove of user-generated discussions is a valuable asset for AI startups and marketers, Huffman stated that the company will continue to license its data with safeguards to protect users and its business. Despite a 53% sequential revenue growth in the quarter ending September 30, Reddit's growth has slowed in comparison to rivals like Snap and Pinterest.

To improve its monetization, Reddit plans to enhance its platform for logged-in users, offering more relevant ads and introducing features such as increased video content and better personalization. The company intends to test its logged-in-only experience in select international markets outside the US in Q4 to evaluate its impact before a full rollout, marking the end of two decades of unrestricted browsing.

Reddit's third-quarter revenue of $895 million exceeded analysts' average estimate of $878.4 million, and its revenue forecast for the current quarter of $1 billion to $1.03 billion aligns with expectations. The company anticipates fourth-quarter adjusted earnings before interest, taxes, depreciation, and amortization to range between $480 million and $510 million, slightly below the estimated $512.2 million.