So after Google literally paid Reddit for its content and then ranked them incredibly well in Google Search and its search features, Reddit during its earnings call blamed Google's search algorithm for not hitting its expected user growth.
Here are two headlines:
- Reddit misses daily active unique visitors estimates on Google algorithm change, shares tumble, Reuters
- Reddit shares plunge after Google algorithm change contributes to miss in user numbers, CNBC
I like how CNBC summed it up:
- Reddit shares fell more than 15% on Wednesday after the company reported weaker-than-expected user numbers in its fourth-quarter earnings.
- Global daily active uniques, or DAUq, rose 39% from a year earlier to an average of 101.7 million for the fourth quarter. That trailed Wall Street estimates of 103.1 million.
- A Google search algorithm change caused some “volatility” with user growth in the fourth quarter, but Reddit’s search-related traffic has recovered in the first quarter, Reddit CEO Steve Huffman said.
In a letter to shareholders Wednesday, Chief Executive Steve Huffman said the website "experienced some volatility with Google Search triggered by a periodic algorithm change."
Reddit CEO Steve Huffman said “What happened wasn’t unusual — referrals from search fluctuate from time to time, and they primarily affect logged-out users,” Huffman wrote. “Our teams have navigated numerous algorithm updates and did an excellent job adapting to these latest changes effectively.”
Its daily active unique visitors rose 39% to 101.7 million in the fourth quarter ended December 31, but missed analysts' average estimate of 103.3 million, according to data compiled by LSEG. Their growth has also slowed sequentially.
In early January we reported that Reddit stopped ranking as well but they did seem to bounce back. That being said, here are two charts, one from Semrush and one from Sistrix (thanks Glenn Gabe):
Early on we saw all the bad PR around Reddit dominating Google Search. I mean, Reddit is dominating Google's search results. It was fine to have a sprinkling of it like we did in 2016. But now Reddit is everywhere in Google but I guess that is not good enough for Reddit or its stock price.
Reddit's stock price dropped as much as 15% in after hours trading.
As I said before, I doubt Google will give Reddit such great positions and treatment in the Google Search results forever. We've seen companies get this before from Google and then Google stop that overnight. So be careful with Reddit stock.
Update: Maybe this?
Beyond top-level search visibility, check out trending for AIOs and featured snippets for Reddit. AIOs are sliding for Reddit while featured snippets have seen a big drop over the past 6 months for Reddit. Very interesting... I still need to dig in further. https://t.co/IIsGqHDa4h pic.twitter.com/hwR6JSYKTH
— Glenn Gabe (@glenngabe) February 13, 2025
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