Two of the internet's biggest ad-supported platforms are learning a tough lesson: when Google changes how it delivers search results, the ripple effects can be swift and painful. Reddit and Pinterest both reported that shifts in Google Search are cutting into the traffic that feeds their advertising businesses.
Google's AI search is keeping clicks to itself
Reddit, the sprawling forum site where millions of users gather to discuss everything from investing to cooking, said that referrals from Google have been falling by more than 1 million per week on average in October. If that trend continues, the company warned that its daily active unique visitors could drop by a low double-digit percentage in the fourth quarter, from roughly 130 million.
The culprit, according to analysts at JPMorgan, is Google's newer AI features that answer queries directly on the search results page. Instead of sending users to external sites like Reddit, Google now often provides a summary right there, meaning fewer clicks for outside publishers. Google has also changed how it ranks machine-translated pages, which can affect sites that rely on international traffic.
This is part of a broader shift in how people find content online. For years, Google has been the front door to much of the internet, directing traffic to websites that then sell ads against that audience. But as AI summaries become more common, that door is getting narrower.
Pinterest's miss adds to the caution
Pinterest, the visual discovery and bookmarking site, also felt the chill. The company reported third-quarter revenue of $1.17 billion, which came in below analyst estimates. Its forecast for fourth-quarter revenue of $1.425 billion to $1.475 billion also fell short of Wall Street's expectations.
RBC, a Canadian bank, pointed to changes in European Union rules around "de minimis" thresholds—the value below which imported goods are exempt from customs duties. Those changes affect cross-border sellers, who are a key source of ad spending on Pinterest, and they appear to be hitting Europe sooner than expected.
Together, the two companies' updates paint a picture of an ad market that is increasingly at the mercy of forces outside its control. Both Reddit and Pinterest rely heavily on Google to bring in new visitors, and when that traffic slows, their ad inventory shrinks.
What it means for investors
For Reddit, the math is straightforward: fewer daily users means fewer ad impressions to sell, which can weaken ad pricing. The company has also committed to significant spending on cloud infrastructure—$880 million with Amazon Web Services and $580 million with Google over three years, after extending both deals through 2029. Those contracts act like semi-fixed costs in the near term, so if revenue softens, profit margins can get squeezed through operating leverage.
That makes traffic a key swing factor for Reddit's earnings. A low double-digit drop in daily users could have a bigger impact on the stock than the raw number suggests, because investors are pricing in future growth. The same logic applies to other ad-supported platforms that lean on Google for user acquisition.
For everyday investors, this is a reminder that companies that depend on a single source of traffic are vulnerable to changes in that source's algorithms. It's not just Reddit and Pinterest—many online businesses, from news sites to e-commerce stores, rely on Google for a significant chunk of their visitors. When Google tweaks its search results, the effects can be felt across the digital economy.
The good news is that both companies are still growing, and they have other avenues for user acquisition, such as direct app usage and social sharing. But the near-term outlook is clouded by the uncertainty around Google's AI features and how they will evolve.
Investors will be watching closely to see whether the traffic declines stabilize or worsen, and how Reddit and Pinterest adapt. For now, the message is clear: in the age of AI search, no one is safe from the whims of the search engine giant.
