The social media platform Reddit, which went public in March 2024, experienced significant traffic disruption in late 2024 due to Google search algorithm changes. This development comes as Reddit continues to expand its revenue streams through AI partnerships and advertising innovations.
The traffic impact: Google’s algorithm update affected Reddit’s visibility in search results, particularly impacting non-logged-in users browsing the platform.
- Daily active unique visitors grew 39% to 101.7 million in Q4 2024, falling short of analysts’ expected 103.3 million
- The platform’s growth rate showed a sequential slowdown
- CEO Steve Huffman reported that search traffic has started recovering in Q1 2025
Financial performance: Despite the traffic challenges, Reddit demonstrated strong financial results and provided optimistic revenue guidance.
- Q4 2024 revenue increased 71% to $427.7 million, exceeding analyst estimates of $405.3 million
- Earnings per share reached 36 cents, surpassing the expected 25 cents
- Global average revenue per user grew 23% to $4.21
- The company forecasts Q1 2025 revenue between $360-370 million, above market expectations
Strategic initiatives: Reddit’s revenue growth is being driven by multiple strategic partnerships and advertising innovations.
- The platform has secured AI data licensing deals with Google and Microsoft-backed OpenAI
- Conversation placement ads in subreddits are proving successful
- CEO Huffman indicated ongoing discussions with “big players” regarding additional data licensing opportunities
Market reaction: The news triggered a significant response from investors and industry analysts.
- Reddit’s shares dropped 15% in extended trading following the announcement
- The stock had previously achieved nearly five-fold gains since its 2024 IPO
- Industry analyst Jeremy Goldman from eMarketer maintained optimism about Reddit’s potential to become a “digital advertising heavyweight” through international expansion and AI advantages
Looking ahead: While the Google algorithm change created short-term challenges, Reddit’s diverse revenue streams and strategic positioning suggest resilience in its business model, though the platform will need to address its vulnerability to search engine algorithm changes to maintain stable user growth.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...