Google zero, eventually, is coming for us all.
It’s the belief, and fear, that significant traffic from Google is trending toward zero because of changes to its search engine practices and, more recently, its move toward AI – answering people’s search questions not with links to places like websites, but with AI summaries and chatbot dialogue.
Reddit’s (RDDT) latest earnings report was an account of changes made by Google’s AI. And it underscored how Silicon Valley’s full embrace of AI could come at the expense of huge swaths of the web — and the companies that rely on Google traffic to operate.
“People still want Reddit. It’s just that Google doesn’t send them to Reddit like it used to,” Steve Huffman, Reddit’s co-founder and CEO, said on a conference call earlier this week.
The company reported that search SEO traffic declined significantly in the most recent quarter. Google’s move to AI Mode and AI Previews has stopped the traffic that once flocked to the social forum.
Reddit stock fell 30% on Friday.
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“Google is crawling us harder than ever, so the demand hasn’t changed from their perspective either,” Huffman said. “The reality is that AI mode doesn’t generate traffic. Not for us, not for anyone, as far as I know.”
The move toward a more AI-driven internet isn’t just hurting Reddit. This also hurts Google, at least in the short term. Its parent company, Alphabet (GOOG, GOOGL), lost nearly $500 billion (or about two Netflix’s) in market value after reporting a slowdown in its core search advertising business, in part due to lower profitability from AI ads.
A critical view of the big picture is that Google is stifling online publishers and sabotaging its own businesses in its race toward AI dominance.
But Reddit took a stand on this call that could be described as corporate Zen: “For AI insights and traffic, look, we don’t control Google. We only control Reddit.”
The company said it doesn’t count on a return of once-sweet Google traffic and plans to require all users to create Reddit accounts and log in to access the site.
Other online publishers are turning to subscriptions to create direct relationships with audiences and partnering with AI companies to ride the next wave of LLM-based media and product distribution.
Google, for its part, continues to argue (albeit unconvincingly, given the stock’s slide) that its AI efforts will prevail, even as it’s still trying to figure out the problem of how to make more money with it.
Google executives are undoubtedly not on board with the market sell-off, which brought the company’s price-to-earnings (P/E) ratio to levels not seen since 2012. Management knew this transition was coming. Their argument is that the success of AI tools will generate a new and different business model, and that it will be more profitable than the search-and-click paradigm that the rest of the web relies on.
The problem is that Google has good reason to choose this bumpy path. But it also turns out to be a bear case for almost everyone.
Follow Hamza Shaban on @hshaban.
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