Traffic on Reddit is booming. It can thank Google.

Photo-Illustration: Intelligence

Reddit’s first year as a publicly traded company is going great. The company, which is almost 20 years old, shared an extremely strong earnings report this week: revenue is up 68 percent year over year, daily active unique visitors are up 47 percent, a Reddit has posted a profit for the first time in its entire history made . Profits exceeded analyst expectations and the stock price shot up more than 40 percent.

Reddit had no shortage of other good numbers to share. Advertising revenue rose 56 percent year-on-year to $315 million, while “other” revenue, mainly from AI licensing deals, rose 547 percent to $33 million, a number that is relatively small but highly significant. contributes to the company’s profitability. Revenue per user has also increased slightly, meaning visits are being monetized more effectively on average. After years of slow growth and a stubborn inability to make money despite its size and influence, Reddit is blowing up.

Reddit’s growth and trajectory is undeniable. However, they are also somewhat underexposed in the press release and the letter to investors. Why would a mature, largely unchanged platform suddenly grow like a viral startup? (Reddit’s latest quarterly report featured similarly eye-popping growth numbers.) The company suggests a number of factors – machine translation to localize content for new markets, better posting interfaces and tools for users – but ultimately it’s talking around the obvious answer: Google, the most popular website in the world and by far the largest traffic referrer on the internet is sending more and more people to Reddit. Much more.

The backstory here is a bit vague and contentious, but the basic structure is this: Late last year, Google began prioritizing certain sources of user-generated content in Search in an effort to bring out more “first-person perspectives” in response to questions. This, among other less clearly explained changes, seemed to result in more visibility for forum-like sites like Quora and especially Reddit, which some users were already adding to searches as a kind of hack to improve search results (“best iPhone battery reddit,” for example) .

It was also accompanied by a massive drop in traffic to a range of online publishers, caught the attention of Google analysts and search engine optimization (SEO) experts, and sent waves of panic through the online media, which rely heavily on Google to find readers. “The rise of Reddit is unprecedented,” says Lily Ray, VP at marketing consultancy Amsive. “We have never seen anything like this in the field of SEO.” Between July and August 2023, Ray says, Reddit “really started to take off” in terms of visibility in thousands of popular searches. For informational searches — a term that refers to searches that require the user to answer a specific question — “you’ll see reddit.com at the top of the rankings.” (There is a widespread belief among web publishers and SEO experts that this change is related to Google’s AI licensing deal with Reddit, which was announced earlier this year; the companies deny that the two are related.)

The source of Reddit’s growth is also evident in the official numbers, although Google or search traffic are not specifically highlighted. For example, the daily logged in numbers of active unique visitors worldwide have increased by 27 percent, while the logged in numbersout The daily number of active unique visitors has increased by 70 percent. In the third quarter of last year, logged in users accounted for a slight majority of daily unique visits to Reddit; this year, logged out visitors have taken the lead. This equates to growth driven by people tapping Reddit links in Google, rather than organic growth from people specifically searching for Reddit.

In his letter to investors, CEO Steve Huffman mentions how important Reddit has become to Google – “Reddit was the sixth most Googled word in the US,” he notes – but he’s a bit more indirect when talking about how important Google has become to Reddit . This is as close as he gets (mine in bold):

Looking ahead, improving the search experience on Reddit is an important part of our strategy. We want to ensure that all users have the best possible experience. This includes users comes to Reddit via external searches and those who search directly on Reddit for recommendations on what to buy, what to watch, or which products or services are the best. We know that many users are looking for more than just answers; they’re looking for authentic, real-world insights and advice from the communities on Reddit. We aim to make the experience of navigating conversations and content on Reddit easier and more intuitive.

Again, things are going well for Reddit, and getting lots of new visitors, some of whom will become active users and contributors to the platform, making it more useful and valuable, is good news in several ways. But getting the bulk of your traffic (your main source of revenue as an ad-supported business) from a much larger partner isn’t without risks. Just ask the websites that just saw their previous visitors being redirected to Reddit massively. Or the collapsing American news media!

Reddit has built its reputation as a community of communities, a site where people intentionally spend time and occasionally contribute in the form of posts, conversations, or voluntary moderation. The users were motivated by the presence of other users; Relatedly, for better or for worse, the company had to at least somewhat respond to the demands of Redditors, on whom it depended both for ad revenue and as a source of free content and labor. (In the run-up to its IPO, however, Reddit ran out of patience for this dynamic and reasserted its authority over a restless mod community.) As Reddit becomes more of a de facto Google’s expansion – as a website full of highly searchable content rather than a largely self-contained community – will face several challenges.

Spammers trying to take advantage of Reddit’s Google visibility are already pumping the site full of inauthentic and often AI-generated “parasitic SEO” content, creating new work for already beleaguered volunteer moderators. In 2007, Demand Media, a company that existed to generate Google traffic, achieved a valuation that briefly exceeded that of the New York search engine through a mutually beneficial arrangement with the search engine. Times. Demand Media was a fairly cynical content farm that paid freelancers small fees to produce huge amounts of reasonable search material that filled gaps in Google’s results pages for a short period of time. Reddit, which couldn’t be more different in its history, its role within the wider web, and its relationship with users, nevertheless performs a similar function and delivers similar benefits. It’s not a bad deal! But it’s potentially risky, especially now that Reddit is denying indexing from other search engines that have connections to AI companies, which is basically all of them.

Reddit’s newfound success is at the mercy of Google, in other words, a fact both companies are well aware of: if the search giant decides to start showing fewer Reddit links, or perhaps summarize more of them with AI – he paid for access to all Reddit links. After all, that data could slow or reverse the company’s wild growth, which is a bigger problem now that it has a ticker symbol.

Reddit’s current job is to try to convert the new traffic into users who will stick around, talk to each other, and continue to produce enough actual credible, interesting, or useful content to keep other users engaged — but also for Google to harvest and to advertise. in return for. For years, Reddit had to answer to its investors And the users, whose wishes were not always aligned. Now it must answer to the most powerful website on the Internet.