Google AI Mode cuts off search traffic, Reddit's US daily active users decline year-over-year for the first time

Reddit, a US social platform, recently released its third-quarter financial report, which has become a typical case of this trend. Company co-founder and CEO Steve Huffman said bluntly on the earnings call that users still need content on Reddit, but Google no longer directs users to Reddit the way it used to.

Huffman said Google is still scraping large amounts of Reddit content, indicating that user demand for this information has not disappeared. What has really changed is Google's AI search model: it can answer users' questions directly, but no longer brings corresponding website traffic to content providers the way traditional search did.

In the past, when users searched Google for product reviews, life advice, technical questions or a specific topic, they would often click on Reddit discussion threads and enter the site to read other users' experiences. Today, Google's AI Overviews and AI Mode can directly compile relevant discussions and generate answers on the search page. Even if users obtain the information they would originally have needed to visit Reddit to find, they may no longer have any need to click into the original discussion.

This change has already had a noticeable impact on Reddit's traffic. The company said referral traffic from search engines fell significantly in the third quarter, and in October 2026 alone, search engine referral visits dropped by more than 1 million per week on average.

Reddit's daily active unique visitors in the United States also declined, from 53.2 million in the second quarter to 50.7 million in the third quarter, down 2% year on year. This is the first year-on-year decline in daily active visitors in the US market since the company went public in 2024.

If search traffic continues to shrink, Reddit expects global daily active unique visitors to potentially decline by a low double-digit percentage in the fourth quarter. For a company that relies on user scale to attract advertisers and maintains platform activity through community content, this is undoubtedly a warning signal.

Investors reacted quickly. Reddit's stock price plunged about 30% on October 30, 2026, one of its worst single-day drops since going public. This not only reflects the market's concerns about the company's short-term user growth, but also shows that investors are beginning to reassess the impact of AI search on the business models of internet platforms.

Faced with this change, Reddit has decided to adjust its operating strategy. The company no longer expects Google search traffic to return to past levels, and instead plans to gradually shift to an access model centered on logged-in users, requiring more visitors to create accounts and log in before browsing content.

This adjustment has two main purposes. First, the login mechanism can help Reddit build a more direct relationship with users and reduce reliance on external search engines. Second, logged-in users can provide more interest and behavioral data, making it easier for the platform to make personalized recommendations and place ads.

Reddit also hopes to strengthen protection of its own content. As AI companies increasingly rely on online content to train and improve large language models, user discussions on Reddit have become a commercially valuable data resource. By restricting anonymous access and automated scraping, the company can better control how content is used and turn data licensing into commercial revenue.

However, Reddit stressed that this adjustment does not mean completely eliminating anonymous browsing. The company still plans to retain anonymous access and is redesigning incognito browsing mode. The new login-first strategy will also not be fully implemented all at once; it will first be tested in some markets outside the United States in the fourth quarter of 2026, and subsequent rollout arrangements will be decided based on actual results.

Reddit is not the only company affected by AI search. A large number of news websites, content publishers, education platforms, travel sites and product review sites all rely on Google search for traffic. When search engines begin to provide answers directly instead of directing users to sources of information, these websites' advertising revenue, subscription conversions and user growth may all be affected.

More notably, this change has even begun to backfire on Google itself.

Alphabet's recent earnings showed that growth in its core search advertising business has slowed. Because AI search requires more computing resources, and users no longer click on traditional search ads as frequently as before, how to maintain original profitability in the AI search environment has become a problem Google must solve.

The market reacted strongly. Alphabet's stock price fell sharply after the earnings release, and its market value at one point evaporated by nearly $500 billion. Analysts believe that Google is driving a technological transformation that could change the entire internet business model, but it has not yet fully found a mature profit model that can replace traditional search advertising.

From Google's perspective, AI search can help users get answers faster, improve the search experience, and help the company maintain an advantage in the new round of artificial intelligence competition. Google management believes that AI tools can create new business models in the future, and their long-term profitability may even exceed the traditional search and click model.

But for websites that depend on Google traffic to survive, this transformation means another reality: they provide content, Google scrapes the content, AI then uses that content to answer users' questions directly, and the website traffic that should have flowed to content creators may disappear.

Reddit's choice also reflects the structural changes taking place on the internet. For more than two decades, the basic logic of the open web has been that users discover websites through search engines, websites earn revenue through advertising and subscriptions, and search engines gain commercial value by organizing and distributing information. Today, AI search is changing this cycle: information may still be used, but content providers may no longer receive corresponding traffic and revenue.

If this trend continues to expand, the internet may gradually transform from an open web based on public web pages and free links into a closed ecosystem in which a small number of large platforms and AI services control information gateways. Websites will be more inclined to require users to log in, pay for subscriptions, or sign data licensing agreements with AI companies to make up for losses caused by reduced search traffic.

This also means that the biggest problem facing the internet in the future may no longer be whether users can find information, but who bears the cost of producing information. When AI can directly absorb and organize content from across the web but no longer brings enough traffic to original content providers, the economic foundation on which the open web depends may be shaken.

Reddit co-founder Huffman also expressed mixed feelings about this. He acknowledged that he has long believed in the value of the open internet, but after considering the platform's future development, he ultimately concluded that shifting to a login-first model better serves Reddit's commercial interests.

This may be exactly a microcosm of what the internet industry is currently facing: AI is making information access more convenient, but it may also make it increasingly difficult for the websites that produce and maintain this information to survive. For the internet as a whole, how to establish a new balance of interests between the efficiency of AI-provided answers and the survival of original content producers will become an unavoidable issue in the coming years.