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Google and Reddit both reported pressure tied to changing search behavior: Google said AI Mode generates less revenue than traditional search, while Reddit said search traffic had fallen meaningfully. The reports point to a shared tension as AI answers keep users on search platforms and publishers seek ways to protect traffic, advertising value and access to their content.
Google and Reddit each reported a business setback linked to changes in search: Google said its AI Mode earns less than traditional search, while Reddit reported a meaningful decline in search traffic. The disclosures, made on the same day as both companies reported quarterly results, highlight a shared challenge: AI-powered search may keep people on search platforms while reducing the value of referrals and advertising elsewhere.
Google Chief Business Officer Philipp Schindler told an analyst that increased use of AI Mode was one reason search revenue growth had slowed, despite rising query volume. The source report says Google’s search and related advertising revenue still grew 12 percent to $63.35 billion, but that growth was slower than the 19 percent reported in the first quarter and 17 percent in the second. It was essentially flat from the previous quarter, according to the report.
Reddit reported that its traffic from search had fallen meaningfully and said daily users might decline by a low double-digit percentage in the fourth quarter. CEO Steve Huffman said the company would increasingly require visitors to log in. He said accounts provide more signals for ad targeting, generally lead to greater engagement and help Reddit protect access to its data.
The companies also faced immediate market reactions. Alphabet shares fell 12.6 percent, wiping out about $500 billion in market value, as investors focused on the cost of its AI infrastructure plans and reported negative free cash flow of $9 billion. Reddit shares fell 15 percent after its results. Those price moves are confirmed in the source report; they do not, by themselves, establish the long-term effects of AI search on either business.
AI Search Pressures Referral Economics
The shared issue is not that Google search has stopped growing or that Reddit has confirmed a long-term collapse in its audience. Rather, the disclosures point to a change in where value is captured. If Google’s AI tools answer more questions without sending users onward, Google may earn less from those interactions than from conventional search, while websites that depend on search referrals can lose visits.
That matters to publishers and online communities because traffic supports advertising, subscriptions and the exchange of content for visibility. Reddit’s plan to put more of its site behind account requirements reflects a possible response: gather more information about users, strengthen engagement and limit access to its material. The source does not establish that this change will restore lost search traffic or revenue.
For Google, the tension is strategic. AI answers may respond to user demand, but the reported monetization gap raises questions about how quickly the company can make the new search experience financially comparable to traditional results. Alphabet’s market decline also shows that investors were weighing the large cost of AI infrastructure alongside the uncertain returns, not just the performance of a single product.
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From Search Referrals to AI Answers
The earlier search arrangement sent users from Google results to publishers’ websites. Google earned money from advertisements around search, while publishers could benefit from visitors who arrived through those links. The source report describes a gradual shift: Google increasingly provided answers directly on its results pages, reducing the need for some users to visit another site.
Google’s AI Overviews place generated answers above conventional results, while AI Mode offers a separate AI-driven search interface. The report says Google executives had previously described Overviews as monetizing about as well as traditional search. Schindler’s comments about AI Mode, by contrast, indicated a revenue disadvantage for that experience; the source does not provide a specific revenue-per-query figure.
Reddit benefited when Google began featuring forum discussions more prominently in search results. The source reports that Google later paid Reddit $60 million a year to license its data after Reddit restricted bot access. That history makes the reported traffic decline particularly relevant: Reddit has relied on search visibility while also seeking control over how its discussions and data are accessed.
“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
Revenue and Traffic Effects Remain Unclear
The reports do not establish whether Google’s AI Mode will remain less profitable than traditional search, how quickly its monetization could change, or how much of the slowdown in search revenue growth came from AI Mode rather than other factors. Google’s search and related advertising revenue was still growing, and the source provides no longer-term forecast for the product.
For Reddit, the extent and duration of the search traffic decline are not specified. The forecast of a low double-digit percentage decline in daily users is a possible fourth-quarter outcome reported by the company, not a confirmed result. It is also unclear how many visitors will create accounts, whether login requirements will change engagement or ad revenue, and how much traffic loss is attributable specifically to AI search.
The source is a column that includes interpretation of the companies’ results, not a full set of earnings materials. It does not supply enough detail to compare the companies’ financial exposure directly or to determine whether Google’s AI products are responsible for Reddit’s reported traffic changes.
Watch Search and Login Metrics
The next evidence will come from later quarterly results and company updates. For Google, investors and publishers will be watching whether AI Mode use continues to rise, whether search advertising growth changes, and whether the company provides more detail about monetization. Alphabet’s planned capital spending—reported in the source as up to $205 billion this year, with more spending promised in 2027—will also remain a focus for investors evaluating the cost of its AI push.
For Reddit, subsequent updates should show whether search traffic and daily users follow the company’s stated outlook, and how its increased login requirements affect engagement and advertising. Until those results are reported, the same-day disclosures offer a sign of pressure on the existing search-referral model, not a settled verdict on what AI search will mean for either company.
Key Questions
What do Google and Reddit have in common in these reports?
Both reported pressure connected to search behavior. Google said AI Mode monetizes less effectively than traditional search, while Reddit said its search traffic had fallen meaningfully.
Did Google’s search business shrink?
No. The source report says Google’s search and related advertising revenue grew 12 percent to $63.35 billion. The growth rate was slower than in the previous two reported quarters.
Why does Reddit want more users 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.
Has Reddit confirmed a low double-digit decline in daily users?
No. The company said daily users might decline by a low double-digit percentage in the fourth quarter. That was a forecast, not a confirmed outcome.
Does the reporting prove AI search caused Reddit’s traffic decline?
No. The source reports Reddit’s falling search traffic and Google’s comments about AI Mode’s monetization, but it does not establish that Google’s AI products caused Reddit’s decline.
Source: platformer.news
