Reddit CEO Challenges Google’s AI Overviews as Stock Drops 20%

Reddit's stock fell more than 20% following its Q2 2026 earnings call, even though the company beat investor expectations on most core financial metrics. The culprit: "choppy" search referrals. CEO Steve Huffman used the occasion to publicly question whether Google's AI Overviews feature delivers any real value to publishers, saying the ecosystem is "still looking for that win-win." The comments came alongside reports that Reddit may end its $60 million licensing deal with Google.

What happened

Detail	Fact
Reddit stock decline	More than 20% after earnings call
Reddit-Google licensing deal	$60 million (reportedly under review)
Pew Research finding	AI Overviews cut publisher referrals by almost half vs. 10 blue links
Pew Research sample	900 US adults
Reddit also holds a deal with	OpenAI

During Reddit’s Q2 earnings call, CEO Steve Huffman did more than report numbers. He questioned the value of Google’s AI Overviews, the feature that summarises search results automatically for most queries, and said it has not produced the same kind of referral traffic that traditional blue-link results once did.

Huffman wrote in a letter to investors: “AI compresses the internet into summaries. Reddit delivers the opposite: deep discussions, passionate debates, and lived experiences. People don’t want a summary of Reddit; they want Reddit.”

On the earnings call itself, he added that the classic 10 blue links format “drove tremendous value and growth to the broader ecosystem,” while AI Overviews has “yet to make a similar level of positive impact.”

Is Google’s AI Overviews actually hurting publisher traffic?

A Pew Research study, drawing on data from 900 US adults, found that AI Overviews reduce referrals to publisher websites by almost half compared to standard search results. That tracks with what many publishers report privately.

Google pushed back directly. The company told Ars Technica that the Pew study used “a flawed methodology and skewed queryset that is not representative of Search traffic,” and later posted a blog stating that “total organic click volume from Google Search to websites has been relatively stable year-over-year.”

The dispute is hard to resolve publicly because most publishers are reluctant to share their own traffic numbers. What is clear is that Reddit’s investors are nervous: the stock fell hard on the news that referrals were “choppy,” even though Reddit beat expectations on most other metrics.

Who else is reconsidering their relationship with Google?

Reddit is not alone. According to the Wall Street Journal report cited during earnings, several major publishers are weighing whether to cut ties with Google, including The Economist, Reuters, Politico, and USA Today. All of these organisations have historically depended on Google search traffic as a core distribution channel.

The current structure makes this complicated: appearing in blue links and appearing in AI Overviews are treated as a package deal. A publisher cannot opt into one while opting out of the other. Cloudflare attempted to address this last year by updating the default robots.txt configuration, and Google has made some changes to AI Overviews claiming they will surface more prominent outbound links, but the fundamental dynamic remains the same.

For anyone tracking the broader tension between platforms and AI content scrapers, this earnings call adds another public data point to an already fraught picture.

Why it matters

Reddit’s situation is an unusually public version of a problem affecting almost every content-driven business on the web. Google remains the dominant source of organic referral traffic for publishers, retailers, and community platforms alike. When that channel starts compressing user queries into AI summaries instead of sending clicks, the revenue models built around those clicks come under pressure.

Reddit has a $60 million licensing deal with Google as partial compensation, but that deal is now reportedly up for review. Smaller publishers have no such safety net. They are simply seeing fewer clicks without any corresponding compensation arrangement.

For businesses running SEO programmes right now, this is the concrete risk behind the abstract concern: it is no longer enough to rank. You need to rank in a way that still motivates a click, which is getting harder as AI Overviews answer the query before the user reaches your page.

Our take

Huffman’s framing of Reddit as “the antidote to an automated web” is a sound positioning argument, and the Pew data lends it some credibility. But the 20% stock drop is a reminder that good positioning alone does not replace traffic.

The more useful signal here is that even a platform with a direct revenue deal with Google is publicly questioning whether that relationship makes sense. That tells you something about how publishers at every scale should think about Google dependency in their content strategy.

We have been advising clients to treat Google organic as one input, not a foundation. Owning your audience through email, community, and direct channels matters more now than it did two years ago. It is also worth auditing which of your pages are being absorbed into AI Overviews without sending you any traffic, because that is almost certainly happening and most analytics setups do not surface it cleanly. If you want help understanding where your traffic is actually coming from, that kind of audit is a good starting point for any AI and search integration review.

What to do about it

1. Pull your Google Search Console data for the last 12 months and look specifically at impression-to-click ratios by query type. A rising impression count with flat or falling clicks is a sign your content is being surfaced in AI Overviews without generating visits.
2. Identify your highest-traffic informational pages and assess whether the query intent is being fully answered in the SERP without a click. Those pages are your highest-risk assets.
3. Prioritise content that requires depth, first-hand experience, or community perspective. These are the formats AI Overviews handle worst, which is exactly Huffman’s argument.
4. Build or strengthen direct audience channels: email lists, newsletters, and community platforms that do not depend on Google referrals as the entry point.

The companies that will weather this shift are the ones that treat Google traffic as a bonus, not a budget line.

Source: Ars Technica · AI