Reddit search traffic slumps, will push visitor sign-ins to curb AI scraping

Oct 29 (Reuters) – Reddit CEO Steve Huffman outlined a plan on Thursday to make signing-in mandatory for most content as the company grapples with data scraping and declining search referral traffic in ​recent months.Huffman warned that total daily active unique visitors (DAUq) could ‌fall by a low double-digit percentage in the fourth quarter from about 130 million currently, if search referral traffic continues to decline further. Shares of the company fell more than 9% in extended trading.Search engine referrals to Reddit decreased by more than one ‌million ​on average each week during October, he said. ⁠In the US, its biggest ⁠market by revenue, DAUq fell 2% to 50.7 million.Reddit, which licenses its data to OpenAI and Alphabet’s Google, has sued IPO-bound Anthropic, Perplexity AI and three data scraping companies, accusing them of illegally collecting ​Reddit’s data.The social media company’s trove of user-generated discussions is a prized asset, offering AI startups data to train models and helping marketers get ⁠insights for ads.“We will continue licensing our ⁠corpus intentionally, but those commercial deals come with guardrails ​that protect our users and our business,” Huffman said.Reddit’s 53% revenue growth slowed ​sequentially in the quarter ended September 30, but it is ‌still better than rivals including Snap and Pinterest, as they compete for ad dollars with Meta in a tough market.Huffman said Reddit is enhancing its platform for logged-in users, which make up over 80% of the monetization, by ⁠delivering more relevant advertisements and through product improvements like increased video content and better personalization.The company plans to test the logged-in-only experience in select markets outside ⁠of US in the ‌fourth quarter to assess its impact before wider ⁠implementation, the shift that would end two decades of ​allowing anyone ‌to browse Reddit freely without an account.The firm’s ​third-quarter revenue of $895 ⁠million exceeded LSEG-compiled analysts’ average estimate of $878.4 million. Its revenue forecast for the current quarter of $1 billion to $1.03 billion is largely in line with estimates.It expects fourth-quarter adjusted earnings before interest, taxes, depreciation, and amortization to be between $480 million and $510 million, versus estimates of $512.2 million.(Reporting by Jaspreet Singh in Bengaluru; Editing ​by Shailesh Kuber)