Reddit Questions the Value of Google AI Overviews Amid Falling Stock

At the quarterly report to investors, Reddit CEO Steve Huffman used the podium not only for the numbers but also to criticize Google's AI Overviews feature, which automatically summarizes search results for most queries.

“People Don't Want a Retelling of Reddit — They Want Reddit Itself”

In a letter to investors, Huffman laid out his vision of the platform's value in an era dominated by artificial intelligence. As he put it, the internet is being flooded with synthetic content, and people are increasingly longing for a genuine human perspective. “AI compresses the internet into brief summaries. Reddit offers the opposite: deep discussions, passionate arguments, and personal experience,” he wrote, adding that users want “not a retelling of Reddit, but Reddit itself.”

The core problem, in Huffman's view, is no longer about finding information but about finding context, personal opinion, and firsthand testimony. “We've never had so much information — and we've never trusted it so little,” he summed up.

“We're Still Looking for That Win-Win”

In his remarks on the report, Huffman spoke more bluntly: the classic “ten blue links” brought the ecosystem enormous benefit and growth, whereas AI Overviews, from Reddit's standpoint, have yet to deliver a comparable positive effect. “As a business, as publishers, as retailers — we're still looking for that win-win,” he said.

The context of these statements is clear: Reddit has a fairly generous $60 million licensing agreement with Google, but according to July reporting by The Wall Street Journal, the company is considering terminating it. Similar moves are reportedly being weighed by The Economist, Reuters, Politico, and USA Today. Reddit also has a deal with OpenAI.

The Dispute Over Traffic

Last year's Pew Research study (a sample of 900 American adults) found that AI Overviews cut referrals to websites nearly in half compared with the “ten blue links” model. Google called the study's methodology flawed and its set of queries unrepresentative, insisting that it sends sites billions of clicks daily and sees no notable drop in aggregate traffic. In a separate blog post, the company stated that the overall volume of organic referrals from search remains stable year over year — which contradicts the complaints of many publishers.

Part of the problem is that, at present, a site's appearance among the “blue links” and its inclusion in AI Overviews come as a package. Attempts to break this coupling have already been made — for example, Cloudflare tried to change the default robots.txt configuration. Google, for its part, insists that AI Overviews are here to stay and are beneficial to users and the web as a whole.

After the report, Reddit's stock fell by more than 20%, even though on most basic financial metrics the quarter beat expectations. The reason was “uneven” search referrals, in Huffman's words: investors fear that Reddit won't survive without Google's traffic. That anxiety applies to most other creators of content for the open web as well.

Source: Ars Technica