The transition marks a defensive turn for the company as AI-powered search summaries increasingly bypass traditional website visits. While global daily active users held steady at 130.3 million in the third quarter, U.S. engagement slipped to 50.7 million, down from 53.2 million in the previous quarter. Reddit warned that if current search trends persist, the platform could face a double-digit percentage decline in active users by the next quarter.
In section Startups & Technology
Reddit pivots to logged-in model as search traffic craters
With search referrals plunging by over one million per week, Reddit is moving to wall off its platform behind a mandatory login requirement. CEO Steve Huffman confirmed the shift away from the open web, aiming to secure data against AI scraping and bolster advertising revenue amid declining U.S. user counts.
Despite the headwinds, Reddit’s financial performance remains strong. Revenue surged 53% year-over-year to $895 million, buoyed by a 54% increase in ad sales and growth in AI data-licensing deals. By forcing a logged-in experience, the company intends to capture more granular behavioral data, allowing for highly targeted advertising and deeper integration with its new algorithmic “For You” feed. Initial testing of the restricted access model will begin in select international markets later this year, though the company maintains that anonymous browsing options will eventually be preserved through a redesigned incognito mode.
Comments (0)
No comments yet. Be the first!