Reddit has long attracted millions of users through Google, with many appending ‘Reddit‘ to their search queries for better answers. As AI-powered search reduces the need to visit websites, that traffic is drying up. In its third-quarter earnings call, Reddit announced it is transitioning to a primarily ‘logged-in experience.’ The company says the shift protects its data from AI scraping and lets Reddit pursue licensing deals with model providers. It is also a monetization play: logged-in users provide more signals about interests and behaviors, which supports ad targeting and personalization.

The broader shift to an AI-centered web has hit most websites and publishers, reducing click-throughs because AI summaries answer queries directly. Google’s traditional ‘ten blue links’ have also lost relevance, and the change is now affecting Google’s own earnings. At Reddit‘s scale, the numbers associated with such a decline are enormous. Global daily active users were flat quarter-over-quarter at 130.3 million in Q3. U.S. daily active users fell from 53.2 million in Q2 to 50.7 million in Q3, down 2% year-over-year. Search traffic referrals dropped by more than 1 million referrals on average per week in October, and Reddit warned that daily active users could decline by a low-double-digit percentage next quarter if the trend continues—a hypothetical 10-12% drop would bring the platform to roughly 115-117 million daily actives.

At the same time, Reddit has gotten better at monetizing its audience even as growth weakens. Revenue rose 53% year-over-year to $895 million, ahead of Wall Street’s expectations of about $875 million. Net income increased 74% to $283 million. Advertising revenue grew 54% to $847 million, while non-advertising revenue, which includes its AI data-licensing business, grew 35% to $48 million. U.S. average revenue per daily active user rose 53% to $13.82, and globally it increased 36% to $6.87. Logged-in users are typically worth more to advertisers, so the shift could lift these numbers further. Reddit also plans to use the additional signals for personalized feeds, community recommendations, prompts to vote and comment, and its new algorithmic ‘For You’ feed, announced yesterday, which combines posts from subscribed communities with interest-based recommendations.

CEO Steve Huffman wrote on Reddit that as someone whose life has been defined by the open internet, this is a big change, but he believes it is the right decision for the platform and the business. The article suggests the magnitude of the shift makes it a potential canary in the coalmine for the open web. Reddit says the transition will not be overnight: tests will begin in select markets outside the U.S. in the fourth quarter, and there is no timeline yet for worldwide rollout. The company acknowledged that access to a logged-out front page is important, stressed that logged-in use does not require giving up anonymity, and said its incognito mode is being rebuilt. Huffman also said there are still open questions about where the boundaries between logged-in and logged-out experiences should lie, calling the evolution one Reddit is not taking lightly.