Reddit, popularly known as “the front page of the internet,” continues to double down on AI. In its second earnings call since going public, CEO Steve Huffman outlined the company’s plans to introduce AI-powered search capabilities and explore new revenue models. For the second quarter, Reddit reported 342.3 million weekly active users, marking a 57% increase from the previous year. Revenue rose to $281.2 million, surpassing Wall Street’s expectations of $253.8 million.
One of the most significant announcements from Reddit’s earnings call was the introduction of AI-powered search result pages. Scheduled to begin testing later this year, these AI-enhanced search pages aim to provide users with summarized and recommended content, facilitating deeper dives into topics such as products, shows, and games, and helping users discover new communities on Reddit. Huffman highlighted that this new feature would utilize both first-party and third-party AI models, although he did not specify the exact timeline for its implementation.
The announcement marks a departure from Reddit’s traditional search function, which has remained largely unchanged for years. Huffman sees this as a major opportunity to attract new users. Enhanced search capabilities are also expected to become a significant source of advertising revenue, as more targeted and relevant ad placements can be integrated into the search results. By improving the search experience, Reddit hopes to not only retain its existing user base but also draw in new members who can benefit from the platform’s vast and diverse content.
In addition to AI-powered search, Reddit is enhancing its popular “Ask Me Anything” (AMA) sessions. The new format, set to go live site-wide, includes a dedicated AMA tab with options for scheduling and promoting sessions, adding cohosts, and providing RSVP notifications for users. These changes aim to make AMAs more interactive and accessible, allowing users to filter comments based on whether they have been answered or not, and adding an ending note with final thoughts or promotional information.
Beyond search, Reddit is exploring other avenues for monetization. These potential revenue streams include the introduction of paywalled subreddits. This concept involves creating exclusive content areas or private communities that would be accessible only to paying members. While the traditional, free version of Reddit will continue to exist and thrive, the addition of paywalled subreddits is seen as a way to unlock new use cases and attract different types of users and content creators.
This development does not come as a surprise, given that the company has been actively pursuing partnerships to bolster its AI capabilities. Recent collaborations with OpenAI and Google have granted Reddit access to advanced language models, which will be instrumental in developing its AI-powered search feature. Additionally, Reddit has taken steps to protect its content by blocking search engines that do not comply with its data usage policies. “Some players in the ecosystem have not been transparent with their use of Reddit’s content, and in those instances, we block access to protect Reddit content and user privacy,” Huffman explained. “We want to know where Reddit data is going and what it’s being used for, and so those are the terms of engagement.”
