"Reddit announced earnings late last week and it boggles me how people love this stock. I am not a financial expert of analysis but Reddit has been saying for some time that 50% of its traffic comes from Google Search. Reddit also said on this Q3 earnings call that its search traffic is flat and that AI is not a traffic driver, at least not yet."
"Steven Huffman confirmed in the earnings call that approximately 50% of its traffic is direct and the other 50% comes from Google. We saw where Google sent Wikipedia tons of its traffic, then before that we had Yahoo Answers, before that, someone else. I mean, these are trends that change over time. He also said that, "External search was basically flat. Of course, that can ebb and flow.""
Reddit reported strong third-quarter financials with significant year-over-year sales growth and a sizable net income increase. Approximately half of Reddit's traffic is direct while the other half is sourced from Google Search, making the site heavily dependent on an external search provider. External search referrals are currently flat and AI-driven sources are not generating meaningful traffic. The dependency on Google carries risk because search referral patterns have shifted historically for other sites. Diversification of traffic sources is advised to reduce vulnerability if search partnerships or algorithms change.
Read at Search Engine Roundtable
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