Reddit’s shares lost more than 29% of their value in a single day after the company reported a sharp drop in traffic from Google. The platform’s management attributes this to the spread of AI Overviews and AI Mode — artificial intelligence tools that answer users’ questions without the need to visit third-party websites. An analysis by UkrMedia suggests that Reddit’s problems may be part of wider changes to the internet that are already affecting news outlets, information resources and businesses reliant on search traffic.
Reddit has suffered the biggest one-day fall in its share price in history
At the close of trading on 30 October on the New York Stock Exchange, shares Reddit fell by 29.22% — from $129.60 to $91.73 each.
This marked the biggest one-day fall in the company’s share price since it went public in March 2024.
Reddit’s market capitalisation fell by approximately $7 billion. Its share price dropped to its lowest level in over a year.
The reason for the large-scale sell-off was not only the financial results, but above all the management’s warnings regarding future audience growth.
During the presentation of the quarterly results, Reddit’s Chief Executive Officer Steve Huffman reported that the number of visits from search engines had fallen significantly in the third quarter, and that the decline had accelerated in October.
According to him, during October search traffic It fell by an average of more than a million visits each week.
If this trend continues, the total number of daily unique users on Reddit in the fourth quarter could fall by a double-digit percentage from the current level of approximately 130 million.
It was precisely the threat of a decline in audience numbers that caused concern amongst investors, as the number of users has a direct impact on the platform’s advertising potential.
Why has Google stopped directing users to Reddit?
Reddit’s management attributes the drop in traffic primarily to changes in the way Google’s search engine works.
Previously, a user looking for an answer to a question would see a list of websites and click through to one of them. Now, Google is increasingly displaying a ready-made answer generated by artificial intelligence.
Two main tools are used for this purpose.
AI Overviews — automatically generated summaries that appear directly in the search results and summarise information from various sources.
AI Mode — an advanced search mode that allows you to interact with artificial intelligence, ask follow-up questions and receive comprehensive answers.
Both tools may contain links to the original sources. However, users often obtain the information they need even before visiting the website.
This is particularly noticeable on Reddit. For many years, the platform’s pages featuring discussions, reviews and practical advice have ranked highly on Google. Now, the search engine can summarise the content of these discussions itself and show the user the answer without directing them straight to Reddit.
Gaffman noted that Google. continues to actively scan the platform’s content, but is bringing it fewer and fewer visitors.
At the same time, the company is also considering another possible reason for the drop in traffic — a decline in the rankings of automatically translated pages. This may have had the greatest impact on the international audience.
The exact contribution of each factor has not yet been established, so it would be incorrect to claim that the fall in Reddit’s share price was caused solely by AI Overviews.
Research shows that AI-generated responses reduce the number of page views
The issue highlighted by Reddit is already evident in studies of Google users’ behaviour.
According to data from the Pew Research Centre published in 2025, users clicked on standard search results in only 8% of cases when they saw an answer generated by artificial intelligence.
If there was no AI Overview, this figure stood at 15%. Even fewer people clicked on the sources listed directly in the AI Overview. Such clicks accounted for just 1%.
A similar trend was identified by the analytics firm Ahrefs. In a study updated in February 2026, experts analysed 300,000 search queries and found that the presence of AI Overview is associated with a decrease in the average click-through rate of the first organic result by approximately 58%.
This refers to the average figure for the queries analysed, rather than a guaranteed reduction in traffic of 58% for each website.
The results depend on the topic, the type of query, the level of competition, and the extent to which the user receives a comprehensive answer directly on Google.
Google itself paints a different picture. According to its data, the total number of organic search visits remains relatively stable, and visitors who land on websites following a search are more likely to show an interest in their content.
Thus, independent studies and Google’s own assessments highlight different aspects of the changes in search traffic. There is not yet enough public data to assess the impact on all categories of websites in the same way.
Why did share prices fall, even though Reddit increased its profits?
The most interesting aspect of the situation is that Reddit’s financial results for the third quarter were quite strong.
The company’s revenue rose by 53% compared with the same period last year, reaching $895 million.
Net profit stood at $283 million, whilst advertising revenue increased by 54% to $847 million.
The total number of daily unique users also rose by 12% year-on-year, reaching 130.3 million.
However, there are problems lurking behind these figures.
In the US Reddit’s daily audience has fallen by 2% — to 50.7 million users. This marked the first annual decline in the US user base since the company went public.
Furthermore, the revenue forecast for the fourth quarter stands at $1–1.03 billion, whilst Wall Street analysts had expected approximately $1.05 billion.
For investors, this means there is a risk that future growth could slow down, even with the current high profits.
Reddit’s business model relies on its ability to attract new audiences and bring people back to the platform. If external search engines cease to fulfil this function, the company will have to find other ways to retain users.
Reddit plans to restrict access to content without authorisation
In response to changes in search traffic, Reddit is preparing a new approach to user access.
The company plans to test restrictions on viewing certain content without logging in. The first trials are due to take place in selected international markets outside the US.
The aim is to encourage more visitors to use Reddit directly, rather than arriving on the platform solely via a search engine. Logged-in users are more likely to return to discussions, receive personalised recommendations and engage with adverts.
Furthermore, the new approach will enable the company to exercise greater control over the use of its content by automated data-collection systems.
However, completely closing off access to content also carries risks. If search engines or new users lose access to discussions, Reddit could face a further decline in its external audience. The company will therefore continue to experiment with different access options for the time being, rather than imposing the same restrictions on all users.
What Google’s changes mean for news websites
The situation with Reddit has wider implications for online publications, information portals and other resources that rely on traffic from search engines.
The traditional model involved Google indexing content, displaying it in its search results, and interested users clicking through to the website. The publisher gains an audience and can generate revenue from advertising, subscriptions or other services.
AI-generated answers partially alter this model. A search engine can use information from several sources to produce a summary, whilst keeping the user on the same page.
The most vulnerable content may well be material that answers simple information-based queries: explanations of terms, brief instructions, reference articles and answers to frequently asked questions.
If the AI provides a satisfactory answer straight away, the user may not need to consult the original source.
In contrast, investigative journalism, exclusive interviews, original reports, topical local news and articles containing unique data have a different kind of value.
It is more difficult to replace such articles entirely with a brief automated summary, particularly when the reader needs details, documents, testimonies or constantly updated information.
This does not guarantee protection against a drop in traffic, but it does reduce reliance on content that can easily be summarised in a few sentences.
For editorial teams, it is not only Google rankings that are becoming important, but also the actual number of clicks, the proportion of regular visitors and the number of users who visit the site directly.
How can website owners assess the impact of AI Overviews?
In June 2026, Google introduced separate reports for generative search features in Search Console, and by the end of August had rolled them out to all websites.
These tools allow you to view page impressions in Google’s AI features, including AI Overviews and AI Mode, as well as analyse pages, countries, devices and visibility trends.
However, impressions in generative search results do not equate to visits to the website. Therefore, for a comprehensive assessment, it is necessary to compare visibility reports with the number of organic clicks, CTR, search queries and changes in rankings.
For example, if the number of impressions for a piece of content remains stable or increases, whilst the number of clicks decreases, this may indicate a change in user behaviour when searching. At the same time, this situation may also be caused by other factors — changes in seasonal demand, competition, new elements in search results or algorithmic updates.
For news organisations, the development of their own content distribution channels – direct links, email newsletters, social media and a loyal readership – is of particular importance.
Reddit, with over 130 million daily users, has already faced the risks of being dependent on Google. For smaller websites, where organic search accounts for the bulk of their traffic, similar changes could have an even greater impact.
