Google still reads Reddit as closely as ever, but it has stopped sending people there. On Friday, that cost Reddit more than $7 billion as its stock fell 29% to $91.73, its worst day ever.

Reddit is not alone. Publishers, travel sites, and image platforms have told investors the same Google traffic is drying up.

What Did Google Change?

Google now answers many questions itself, with AI summaries and a chatbot-style AI Mode. Fewer people click through.

“Google is crawling us as hard as ever”

That was Reddit CEO Steve Huffman on October 29. Searches sent Reddit over 1 million fewer visits a week in October.

“The reality is the AI Mode does not drive traffic,” Huffman added.

Reddit warns daily users could fall by a low double-digit percentage this quarter. That is at least 13 million fewer people a day. Yet sales jumped 53% to $895 million.

Alphabet, Google’s owner, lost about $500 billion on Thursday in its own post-earnings selloff, as search growth slowed to 12%.

Reddit Stock (RDDT) Performance. Source: Yahoo Finance

Who Else Depends on Google’s Clicks?

People Inc. (PPLI), publisher of People magazine, saw Google search traffic fall 40% in a year, Digiday reported.

Tripadvisor (TRIP) CEO Matt Goldberg blamed AI Overviews for fewer drive-by visitors, per Skift.

Pinterest (PINS) warns that its search traffic sits outside its control, Barron’s noted. Its shares fell nearly 8% Friday after an earnings miss.

Homework-help company Chegg sued Google over AI summaries. Its shares slid from $113 in 2021 to about $1.

Chegg Stock (CHGG) Performance. Source: Yahoo Finance

Is Reddit the Next Chegg?

Reddit’s defense is its loyal users. Chief Operating Officer Jen Wong said over 80% of its money comes from logged-in and app users.

Its posts also feed AI. Market account Bull Theory claims AI pulls about 40% of its answers from Reddit threads. Google and OpenAI reportedly pay about $60 million and $70 million a year to license them, as its Google licensing deal nears expiry.

Even after the crash, Reddit trades at 19 times expected earnings, against 7.5 for Snap, Reuters data shows.

This quarter’s user count will show whether loyal users can replace Google’s clicks.

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