--- title: "Reddit starts selling ads in its search box as Google's AI cuts referrals by more than a million a week" description: "Days after guiding the fourth quarter below the street and losing 29.2% in a session, Reddit began testing ads against its own search results. The bet: a logged-in user's query is worth more than the anonymous visitor Google's AI search stopped sending." publisher: "The Inference" section: "Applications" published: 2026-11-04T00:17:21.120Z modified: 2026-11-04T00:17:21.120Z canonical: https://theinference.org/article/reddit-starts-selling-ads-in-its-search-box-as-google-s-ai-cuts-referrals-by-more-than-a-million-a-week language: en keywords: "Reddit, Google, Advertising, Search, Earnings" --- # Reddit starts selling ads in its search box as Google's AI cuts referrals by more than a million a week > Days after guiding the fourth quarter below the street and losing 29.2% in a session, Reddit began testing ads against its own search results. The bet: a logged-in user's query is worth more than the anonymous visitor Google's AI search stopped sending. [Reddit](https://theinference.org/markets/companies/reddit) [began testing ads inside its own search results on November 3, 2026](https://techcrunch.com/2026/11/03/reddit-tests-ads-in-search-results-as-traffic-declines-and-growth-concerns-mount/), matching placements to queries like "espresso station" for a select group of advertisers [1]. The test landed days after a third-quarter report that beat on revenue and earnings, guided fourth-quarter sales below the street anyway, and cost the stock 29.2% in a single session [2]. Read the two moves together: the [login wall we covered on Monday](https://theinference.org/article/reddit-is-losing-a-million-search-visits-a-week-so-huffman-is-locking-the-door) is the defense, and the search box is where the lost revenue is supposed to come from. ## The lost traffic is structural, not a slow month [On last week's earnings call](https://finance.yahoo.com/markets/stocks/articles/reddit-inc-rddt-q3-2026-031222789.html), chief executive Steve Huffman attributed the decline to Google's AI Overviews and AI Mode, which answer the question on the results page instead of sending the click onward; referrals to Reddit fell by more than a million a week on average in October, and the slide accelerated through the quarter [3]. Global daily users were flat at 130.3 million, and United States users fell 2%, the first decline since the 2024 listing [4]. If the pace holds, management said, daily users could fall by a low-double-digit percentage this quarter [3]. Nothing in that reads temporary. Schools that switch [Google](https://theinference.org/markets/companies/alphabet)'s AI features off now lose Search as well, because the AI is, in the company's word, deeply integrated into it [5]. As Huffman put it, [web search is turning from a gateway into a destination](https://247wallst.com/investing/2026/10/30/reddit-plunges-25-as-search-traffic-slump-and-soft-outlook-overshadow-earnings-beat-snap-falls-5-pinterest-drops-4-meta-dips/) [6]. ## Search intent is the inventory Google left behind A query typed into Reddit's search box is declared purchase intent, the same inventory Google sells against its own results, and Reddit has started selling it against its own [1]. The test starts small, with contextual matching and a select advertiser group [1]. It matters more sitting on the login wall that begins in non-United States markets this quarter: logged-in users carry identity and behavior signals, and they already generate more than 80% of Reddit's monetization [3]. [Average revenue per user rose 36% in the quarter the user count flattened](https://theinference.org/article/reddit-charges-advertisers-36-more-per-user-for-an-audience-that-stopped-growing) [3]. The wall also makes Reddit's archive harder to scrape, which strengthens its hand in open licensing talks with Google and [OpenAI](https://theinference.org/markets/companies/openai), talks that [reportedly include second thoughts about the roughly $60 million a year Google pays today](https://finance.yahoo.com/technology/ai/articles/reddit-rddt-may-rethink-60-231251979.html) [3][7]. ## February prices the trade between users and revenue per user The bear case is one trend: revenue growth has slowed every quarter this year, and management guided the fourth quarter lower still [3][8]. The bull case is that price is doing the work, with ad rates rising faster than impressions and operating margin at 29.2% of revenue even as growth decelerated [3][8]. The fourth-quarter print, due in February 2027, settles the exchange rate between a shrinking user base and rising revenue per user [2]. *Chart: **Revenue growth has slowed every quarter this year, and Q4 is guided lower still** Column chart of Reddit's year-over-year revenue growth: 69.7% in Q4 2025, 69.1% in Q1 2026, 61.1% in Q2 2026, 53.0% in Q3 2026, and a guided 38 to 42% for Q4 2026.* *Year-over-year revenue growth by calendar quarter, from Reddit's SEC filings; the Q4 2026 bar is management's guided range. Sources: SEC filings; GuruFocus earnings-call summary. [8][3]* *Chart: **Operating margin sits near 29% even as revenue growth decelerated** Line chart of Reddit's operating margin by quarter: 1% in Q1 2025, 13.6% in Q2 2025, 23.7% in Q3 2025, 31.9% in Q4 2025, 27.6% in Q1 2026, 28.8% in Q2 2026, and 29.2% in Q3 2026.* *Reddit operating margin, percent of revenue, by calendar quarter, from its SEC filings, Q1 2025 to Q3 2026. Source: SEC filings, retrieved 4 November 2026. [9]* The direction of the business does not wait on that print. The web's old bargain, content indexed in exchange for visitors, is being rebuilt behind login walls where intent and identity are sold together. Reddit can make that trade because it owns the query, the account, and an archive AI firms will pay to license [3][7]. ## The referral economy is not coming back A mid-sized publisher owns none of the three, and that asymmetry is the distribution problem AI search creates as it decides who gets paid [4]. The referral economy is not coming back. Reddit is right to stop waiting for it and start selling the search. ## Takeaway Reddit is answering Google's AI-driven referral decline by selling ads against its own logged-in search queries, and the fourth-quarter print in February prices whether rising revenue per user can outrun a user base that has stopped growing. ## Sources 1. [TechCrunch, Sarah Perez, "Reddit tests ads in search results as traffic declines and growth concerns mount", 3 November 2026](https://techcrunch.com/2026/11/03/reddit-tests-ads-in-search-results-as-traffic-declines-and-growth-concerns-mount/) 2. [Trefis via Yahoo Finance, "What Did Reddit's Quarter Change For Its Stock?", 3 November 2026](https://finance.yahoo.com/markets/stocks/articles/did-reddits-quarter-change-stock-202016588.html) 3. [GuruFocus via Yahoo Finance, "Reddit Inc (RDDT) Q3 2026 Earnings Call Highlights", 30 October 2026](https://finance.yahoo.com/markets/stocks/articles/reddit-inc-rddt-q3-2026-031222789.html) 4. [Crypto Briefing, "Reddit CEO says Google's AI features are cutting referrals to the platform", 30 October 2026](https://cryptobriefing.com/reddit-ceo-ai-disrupting-internet-traffic/) 5. [Forbes via MSN, "Google will cut off search engine access to schools banning generative AI", 3 November 2026](https://www.msn.com/en-us/news/other/google-will-cut-off-search-engine-access-to-schools-banning-generative-ai/ar-AA2gFQ8z) 6. [24/7 Wall St, "Reddit Plunges 25% as Search Traffic Slump and Soft Outlook Overshadow Earnings Beat", 30 October 2026](https://247wallst.com/investing/2026/10/30/reddit-plunges-25-as-search-traffic-slump-and-soft-outlook-overshadow-earnings-beat-snap-falls-5-pinterest-drops-4-meta-dips/) 7. [Simply Wall St via Yahoo Finance, "Reddit (RDDT) May Rethink $60 Million Google AI Deal As Renewal Talks Drag", 22 July 2026](https://finance.yahoo.com/technology/ai/articles/reddit-rddt-may-rethink-60-231251979.html) 8. [Reddit, quarterly revenue and operating margin from its SEC filings, retrieved 3 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001713445) 9. [Reddit, quarterly figures from its SEC filings, retrieved 4 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001713445) --- Reddit starts selling ads in its search box as Google's AI cuts referrals by more than a million a week — The Inference. Canonical: https://theinference.org/article/reddit-starts-selling-ads-in-its-search-box-as-google-s-ai-cuts-referrals-by-more-than-a-million-a-week