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Google and Reddit both reported pressure tied to changes in online search: Google said AI Mode generates less revenue than traditional search, and Reddit said search traffic had fallen meaningfully. The reports point to a shared tension as AI answers keep users on search platforms while publishers and websites may receive less traffic or revenue.
Google and Reddit both disclosed business pressures linked to changing online search on the same day their stocks fell sharply: Google said its AI Mode earns less than traditional search, while Reddit reported meaningfully lower search traffic. The disclosures highlight a shared risk as AI-driven search changes how users find information and how advertising and referral traffic are distributed.
Alphabet shares fell 12.6 percent, erasing about $500 billion in market value, according to the Platformer report. Investors were concerned about Google’s planned capital spending of up to $205 billion this year and its negative $9 billion in free cash flow. The report says the drop was the largest one-day decline in Google’s history as a public company.
On an earnings call, Google chief business officer Philipp Schindler said increased use of AI Mode was among the reasons search revenue growth was slowing despite rising query volume. Search and related advertising revenue still grew 12 percent to $63.35 billion, but that growth was slower than the rates cited for the first and second quarters. The report says executives had previously described AI Overviews as monetizing about as well as traditional search; the newer concern centers on AI Mode.
Reddit shares fell 15 percent after the company reported its quarterly results, the report says. Reddit said traffic from search had fallen meaningfully and warned that daily users could decline by a low double-digit percentage in the fourth quarter. CEO Steve Huffman said Reddit would increasingly encourage visitors to log in, citing advertising signals, engagement, data access and adapting to regulations.
AI Search Changes the Traffic Bargain
The two disclosures illuminate different sides of the same shift. Google is keeping more search activity within its own AI experience, but its executive said that use currently produces less revenue than traditional search. Reddit, meanwhile, depends in part on search referrals and says that traffic has weakened, prompting a plan to require more visitors to sign in.
For readers and publishers, the consequences could extend beyond these companies. If search answers satisfy users without sending them to source websites, publishers may lose visitors, while search companies must find ways to make AI experiences commercially viable. The source does not establish that AI Mode caused Reddit’s traffic decline; it presents the two disclosures as part of a broader change in the relationship between search platforms and the web.
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From Search Referrals to AI Answers
Google’s earlier search model sent users to websites whose pages it indexed, while earning advertising revenue on search results. The Platformer report describes a gradual move toward answers delivered directly on Google’s pages, including AI Overviews and the separate AI Mode interface. That shift responds to competition and user demand for direct answers, but may reduce the value of traditional referral traffic.
Reddit benefited when Google began surfacing forum discussions more prominently in search. The report says Google reportedly paid Reddit $60 million a year to license its data after Reddit restricted bots’ access to its forums. The piece also notes that a US antitrust ruling found Google had illegally maintained a monopoly in the ad market; it says the ruling left much of the company’s market power intact.
The same day brought a positive AI development for Google: Platformer reported that Gemini 4 Carbon, then available only to cyber defenders, topped Artificial Analysis’ Intelligence Index. That result did not prevent investor concern about spending and cash flow. The report’s author disclosed that their fiancé works at Anthropic, a competing AI company.
“Among the reasons search revenue growth was slowing was increased usage of AI Mode, which makes less money than traditional search.”
— Philipp Schindler, Google chief business officer, as quoted in Platformer’s account of the earnings call
How Search Changes Will Play Out
The report does not give a precise measurement of how much AI Mode reduces revenue per search, or how much of Reddit’s traffic decline came from Google rather than other sources. Reddit’s projected low double-digit daily-user decline is a forecast for the fourth quarter, not a confirmed outcome. The source also does not specify the calendar date of the Thursday earnings developments.
It remains uncertain whether Google can raise AI Mode monetization, whether Reddit’s login strategy will offset weaker search referrals, and how users will respond to access restrictions. The reported stock movements reflect investor reaction, not proof that either company’s longer-term strategy will fail.
Monetization and Login Plans Ahead
Google’s next test is whether it can fund its large AI infrastructure plans while improving the returns from AI-driven search. Investors will watch subsequent earnings updates for changes in capital spending, cash flow and search advertising growth. The reported index result for Gemini 4 Carbon is a separate measure of model performance and does not answer those financial questions.
Reddit says it plans to push more visitors to log in as search traffic remains under pressure. Future reporting will show whether that approach improves engagement and ad targeting without reducing the number of people who visit the site. The extent and timing of the access changes were not detailed in the source.
Key Questions
What do Google and Reddit’s disclosures have in common?
Both relate to changes in search behavior. Google said AI Mode earns less than traditional search, while Reddit reported a meaningful fall in search traffic.
Why did Alphabet shares fall?
The Platformer report attributed investor concern mainly to Google’s planned AI infrastructure spending and negative free cash flow. Alphabet shares fell 12.6 percent that day.
What is Reddit planning to do about declining search traffic?
CEO Steve Huffman said Reddit would increasingly encourage visitors to log in to use the site. He cited advertising signals, engagement, data protection and adapting to regulations.
Did Google say AI Mode caused Reddit’s traffic decline?
No. The source reports the two developments together but does not establish that AI Mode caused Reddit’s decline. Reddit said its search traffic had fallen meaningfully without assigning the drop to a single cause.
Is Google’s search business shrinking?
The report says search and related advertising revenue grew 12 percent to $63.35 billion. Growth slowed compared with earlier quarters, but the reported revenue was still higher than a year earlier.
Source: platformer.news
