Alphabet’s Google has expanded its partnership with Reddit, a move that comes at a critical time for the social media platform. This collaboration aims to enhance Reddit’s search functionality while also ensuring the platform remains visible across Google’s search ecosystem.
However, analysts have raised concerns about Reddit’s reliance on Google Search traffic. Redburn Atlantic analyst James Cordwell, who recently initiated coverage on Reddit’s stock with a “sell” rating, warned that the platform’s user growth is highly dependent on Google’s search algorithm. Any changes to Google’s ranking system could significantly impact Reddit’s daily active users (DAUs).
Reddit’s Traffic Faces a Decline
Cordwell’s analysis revealed that Reddit is already experiencing the effects of Google’s search algorithm updates. The platform saw a decline of approximately 600,000 U.S.-based DAUs arriving via Google Search in the fourth quarter. This drop indicates that Google’s algorithm changes could have a substantial impact on Reddit’s organic traffic.
Following this report, Reddit’s stock fell by 5.6% during Monday’s trading session, highlighting investor concerns over the platform’s future growth potential.
Google’s AI Integration with Reddit
As part of the expanded partnership, Google is providing Reddit access to its Vertex AI platform—an advanced AI development suite from Google Cloud. This tool allows Reddit to improve its search capabilities, making it easier for users to discover relevant discussions and content on the platform.
Additionally, Google will integrate Reddit’s content more effectively across its products, ensuring users can find valuable information from Reddit directly through Google Search. This deeper collaboration includes granting Google real-time access to Reddit’s API (Application Programming Interface), enabling a more structured and accurate presentation of Reddit’s content in search results.
What This Means for Reddit’s Future
Despite this AI-powered enhancement, concerns remain about Reddit’s long-term user engagement. Cordwell pointed out that while Reddit continues to attract users searching for specific answers, the platform’s organic growth—users who actively engage beyond a single search—has remained relatively stagnant over the past six months.
With Reddit’s stock already reacting negatively, it remains to be seen whether this partnership with Google can offset the potential risks posed by declining search-driven traffic.
