The Reddit platform is considering ending its cooperation with Google, which brings it $60 million annually. The reason may be the implementation of the AI Overviews feature, which negatively affects the volume of user transitions to source websites.
What happened
Reddit is exploring the possibility of terminating its multi-million dollar deal with Google due to the AI Overviews feature. According to Chartbeat data, the use of generative answers in search leads to a drop in CTR for original sources by approximately 60%. At the same time, Reddit is already collaborating with OpenAI under a $70 million per year contract and is engaged in legal disputes with Perplexity AI over illegal data scraping.
Context
The traditional model of interaction between search engines and content platforms was built on exchanging data for traffic. However, the transition to a model where the search engine consumes content to generate ready-made answers destroys this balance, turning search engines from guides into data consumers.
Why it matters for the industry
There is a growing conflict of interest in the industry between AI developers and content owners. This could trigger a shift from a traffic-exchange model to strict data licensing and the creation of closed ecosystems with protection against bots and paid access for parsers.
Why it matters for users
Users may face changes in the familiar way of searching for information. Instead of navigating to forums and discussions in Reddit communities, people will receive ready-made synthesized answers from AI, which potentially reduces the role of human experience and live discussions in search results.
What is not yet known / limitations
There are disagreements in assessing the long-term consequences: some experts emphasize the technical degradation of the open web, while others focus exclusively on the commercial shift in the monetization paradigm.
Sources
Author
Look at AI, editorial team