Reddit stock drops 20% as CEO questions whether Google's AI Overviews deliver any value to publishers
Published · updated · curated by AI Is Going Just Great
Source: arstechnica.com ↗
AI compresses the internet into summaries. Reddit delivers the opposite: deep discussions, passionate debates, and lived experiences. People don't want a summary of Reddit; they want Reddit.
Reddit's shares fell more than 20% after its Q2 earnings call, despite the company beating expectations on most basic financials. The culprit: Google's AI Overviews. CEO Steve Huffman told investors that traditional search's "10 blue links" had driven real ecosystem value, while "AI Overviews has yet to make a similar level of positive impact." He summarized the publisher situation bluntly: "we're still looking for that win-win."
The comments land against a complicated backdrop. Reddit holds a $60 million licensing deal with Google and is now reportedly considering ending it, with outlets including Reuters, The Economist, and Politico weighing similar moves. A Pew Research study found AI Overviews cut referrals to publisher sites by roughly half compared to the blue-links model. Google disputes the methodology and says aggregate web traffic from Search has remained "relatively stable year-over-year" — a characterization most publishers quietly disagree with.