close
close

tub-blois

Breaking: Beyond Headlines!

Traffic on Reddit is increasing. That can thank Google.
aecifo

Traffic on Reddit is increasing. That can thank Google.

Photo-Illustration: Intelligencer

Reddit’s first year as a publicly traded company is going swimmingly. The company, which has existed for almost 20 years, shares a extremely strong earnings report this week: revenue increased 68% year over year, daily active unique visitors increased 47%, Reddit turned a profit for the first time in its entire history. Profits beat analysts’ expectations and the stock price soared more than 40 percent.

Reddit had no shortage of other good numbers to share. Advertising revenue increased 56% year-over-year to $315 million, while “other” revenue, primarily from AI licensing deals, increased 547% to $33 million. dollars, a relatively low figure but which contributes significantly to the company’s profitability. Its revenue per user is also up slightly, meaning that 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 exploding.

Reddit’s growth and trajectory are undeniable. In its press release and letter to investorshowever, they are also somewhat under-explained. Why might a mature, virtually unchanged platform suddenly start growing like a viral startup? (Reddit’s latest quarterly report included in the same way eye-popping growth numbers.) The company suggests a number of factors – machine translation to localize content for new markets, better publishing interfaces and tools for users – but ends up bringing up the obvious answer: Google, the website the most popular in the world. and by far the largest traffic referrer on the internet, is sending more people to Reddit. Much more.

The story here is a bit fuzzy and contested, but the broad strokes are this: Late last year, Google began prioritizing certain sources of user-generated content in search with the aim of to feature more user-generated content.first person points of view» in response to queries. This, among other less clearly explained changes, seemed to result in greater visibility for forum-style sites like Quora and especially Reddit, which some users were already adding to queries as a sort of hack to improve search results ( “best iPhone battery Reddit”, for example).

This also corresponded to a massive fall drove traffic to a range of online publishers, caught the attention of Google analysts and search engine optimization (SEO) experts, and sent a wave of panic through online media, which depends heavily from Google to find readers. “The rise of Reddit is unprecedented,” says Lily Rayvice president of the marketing consultancy Amsive. “We’ve never seen anything like this in SEO.” Between July and August 2023, Ray says, Reddit “really started to take off” in terms of visibility across thousands of popular searches. Now, for informational searches – a technical term referring to queries in which the user has a specific question to answer – “you’ll see reddit.com ranking near the top.” (Among web publishers and SEO experts, there is a widespread belief that this change is related to Google’s AI licensing deal with Reddit, which was disclosed earlier this year; businesses refuse that the two are linked.)

The source of Reddit’s growth is also evident in its official numbers, although they don’t specifically break down Google or search traffic. For example, the daily number of unique and active logged-in visitors increased by 27% globally, while the number of daily logged-in unique visitors increased by 27% globally.out the daily number of unique active visitors increased by 70 percent. In the third quarter of last year, logged in users accounted for a slim majority of daily unique visits to Reddit; this year, disconnected visitors took the lead. This is consistent with growth driven by people mining Reddit links in Google rather than organic growth from people specifically searching for Reddit.

In his letter to investors, CEO Steve Huffman mentions Reddit’s importance to Google – “Reddit was the sixth most searched word on Google in the United States,” he notes – but is a little more indirect in talking about the importance of Google to Reddit. This is as close as possible (bold mine):

Moving forward, improving the search experience on Reddit is a key part of our strategy. We want to ensure that all users get the best experience possible. This includes users come to Reddit from an external search and those who search directly on Reddit looking for recommendations on what to buy, what to watch, or which products or services are best. We know that many users are looking for more than just answers; they look for authentic, real information and advice from communities on Reddit. We’re working to make the experience of navigating conversations and content on Reddit easier and more intuitive.

Once again, things are going well for Reddit, and attracting many new visitors, some of whom will become active users and contributors to the platform, making it more useful and valuable, is good news in many ways. But getting the majority of your traffic – your primary source of revenue as an ad-supported business – from a much larger partner isn’t without risks. Just ask websites that just saw their previous visitors redirect to Reddit. in mass. Or the collapse of 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 volunteer moderation. Its users were motivated by the presence of other users; similarly, for better or worse, the company had to be at least somewhat responsive to the demands of Redditors, on whom it depended both for advertising revenue and as a source of content and labor free. (However, as its IPO approaches, Reddit I lost my patience for this dynamic and reasserted its authority over a restless mod community.) If Reddit starts functioning more like a de facto Google extension – as a website filled with highly searchable content rather than a primarily self-contained community – it will face different challenges.

Already, spammers trying to take advantage of Reddit’s visibility in Google, the site is filled with inauthentic and often AI-generated content.parasite referencing” content, creating new work for already beleaguered volunteer moderators. In 2007, Demand Media, a company created to drive traffic on Google, traveled a mutually beneficial arrangement with the search engine at a valuation that briefly exceeded that of New York Times. Demand Media was a fairly cynical content farm that paid small sums to freelancers to produce huge quantities of passable research material, which, for a brief period, filled in the gaps on Google’s results pages. Reddit, which couldn’t be more different in terms of its history, role within the wider web, and relationship with users, nevertheless finds itself serving a similar function and reaping similar benefits from it. Not a bad deal! But it’s potentially risky, especially now that Reddit is refuse indexing other search engines with links to AI companies, almost all of them.

Reddit’s newfound success is at the mercy of Google, in other words, a fact that both companies are well aware of: if the search giant decides to start showing fewer Reddit links, or perhaps starts to sum up more with AI, he paid for access to everyone. This data, after all, the company’s wild growth could stall or reverse, which is a bit more problematic now that it has a ticker symbol.

Reddit’s current task is to try to convert its new traffic into users who will stay, talk to each other, and continue to produce enough credible, interesting, or useful content to keep other users around – but also so that Google can harvest and make advertising. against. For years, Reddit had to answer to its investors And its users, whose desires were not always aligned. Now he has to answer to the most powerful website on the Internet.