A JUST IN post from Polymarket stopped my scroll recently: Traffic to top U.S. news websites is collapsing as AI replaces traditional search.
I immediately thought of Reddit Inc. (RDDT), the online forum where a Google search has long been the front door.
Axios data shows visits to top U.S. news sites are down about 30% from their 2024 peak. Reddit has now shown what that shift looks like inside one company.
On Thursday, Oct. 29, 2026, Reddit said it will move to a logged-in-only experience, according to its third-quarter shareholder letter.
Tests begin this quarter in select markets outside the U.S. A Google search that lands on a Reddit thread may eventually end at a sign-in screen.
Also read: Cramer points to rare Reddit buy opportunity amid Google AI threat
Google’s AI answers are closing Reddit’s front door
Co-founder and CEO Steve Huffman told analysts the change is a big one for him personally. He went further with CNBC, calling Reddit the last platform with basically unfettered logged-out access. “I’ve been holding that line,” he said.
Google broke that line. Reddit said search referrals fell meaningfully in the third quarter, then by more than 1 million a week on average in October. If that pace holds, daily users could shrink by a low double-digit percentage this quarter from about 130 million, the company warned.
Huffman blamed AI Overviews and AI Mode from Alphabet Inc.’s (GOOGL) Google, which answer questions on the results page.
“The reality is the AI mode does not drive traffic,” he told Citizens analyst Andrew Boone on the earnings call. He added that “Reddit” still ranks among Google’s most searched words, so demand has not faded.
Google’s own numbers hint at why it keeps users close. Search and other revenue grew 12% in the third quarter, according to Alphabet’s earnings release. A business growing at that pace has little reason to send its audience elsewhere.
The visitors Reddit is losing pay the least
The traffic Reddit is losing is worth less than it looks. More than half of its daily U.S. users browsed logged out last quarter, the shareholder letter shows. Yet logged-in and app users generate more than 80% of Reddit’s monetization, Huffman wrote.
In other words, Google is mostly taking away the crowd that pays less than a fifth of the bills. Logged-in users also hand Reddit more signals for ad targeting, the letter adds.
Data is the other prize. Huffman told analysts the vast majority of scraping happens through logged-out access. With Google licensing talks still underway, CNBC reported, closing that side door strengthens Reddit’s hand.
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Huffman said Reddit still wants visitors to get a taste of the site and shared links to keep working.
Only about 13% of eligible mobile web users see the prompt to download the app, the letter notes, leaving room to grow.
The most revealing line on the call came near the end. Huffman told Wedbush analyst Ygal Arounian that he expects total daily users and logged-in users to roughly converge over time.
Logged-in users totaled 53.5 million last quarter, against 130.3 million total, according to the letter.
That gap is the whole bet. If it closes through sign-ups, Reddit wins a smaller but far more valuable audience. If it closes through lost visitors, the headline user count could shrink for quarters, so investors should watch logged-in growth instead.
Wall Street cut targets despite a strong quarter
Strong results did not protect the stock. Reddit’s third-quarter revenue rose 53% to $895 million, according to the letter. Yet fourth-quarter guidance of $1 billion to $1.03 billion missed expectations, and shares dropped more than 15% after the release, CNBC reported.
That slide reaches index investors too, since Reddit joined the S&P 500 this quarter, the letter notes. Before the report, the stock was already near the bottom of its 52-week range of $119.27 to $263.50, according to StockAnalysis.
StockAnalysis put Reddit’s forward price-to-earnings ratio near 22.5 before the report. A 15% drop with unchanged estimates would pull that below 20. That looks cheap for a company still guiding to about 40% growth, unless users fall further than Reddit warned.
StockAnalysis shows a consensus Buy from 34 analysts, with an average target of $212.95. That predates Friday’s revisions, which included these, according to Investing.com:
- Target halved to $150 from $300 at Needham, which kept a Buy rating.
- Target cut to $135 from $190 at BofA Securities, which kept a Neutral rating.
- Downgrade to Sector Weight from Overweight at KeyBanc, citing weaker search traffic.
- Downgrade to Market Perform at Citizens, which cited slower user growth and fewer Google referrals.
Huffman left no doubt about direction. He told Jefferies analyst John Colantuoni the test will shape how Reddit makes the switch, not whether it happens.
The web’s oldest bargain is breaking down
For two decades, the web ran on a simple trade: Sites let Google read everything, and Google sent readers back. Reddit, the last big open holdout, is now ending it, according to its CEO’s account.
I have been seeing more sites complain about that broken trade lately, from big news outlets to small blogs that once lived on search clicks.
Axios reported that the slide is already pushing digital publishers into layoffs and consolidation. Reddit is the latest, and loudest, to stop waiting for Google to fix it.
Reddit’s tests outside the U.S. will show whether a sign-in screen builds loyalty or turns curious visitors away.
If the bet pays off, sites sitting on valuable archives will have a playbook to copy. Either way, the open web many of us grew up searching is getting smaller, one login prompt at a time.
