Reddit shares plunged 30.44% to $90.15 on Friday, extending their weekly decline to 44%. Despite third-quarter revenue rising 53% to $895 million, the company forecast quarterly revenue of $1 billion to $1.03 billion, below the roughly $1.05 billion analysts expected. Chief executive Steve Huffman said Google search referrals fell by more than one million per week in October and warned that daily active users could decline by a low double-digit percentage in the fourth quarter. Google traffic is shrinking as its AI-powered summaries and conversational search features answer users directly without sending them to Reddit, putting pressure on advertising and user acquisition. Reddit is trying to reduce its reliance on search by prioritizing logged-in access, but it must also navigate multibillion-dollar partnerships with Google and OpenAI that monetize its content while limiting direct visits.
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