Reddit faces a potential low double-digit percentage drop in daily active unique visitors in the fourth quarter after losing more than 1 million weekly search referrals in October due to Google's AI Overviews. Meanwhile, Pinterest fell short of quarterly revenue forecasts and issued lower-than-expected guidance as changes to the European Union's de minimis exemption curbed cross-border ad spend. Despite the search headwinds, Reddit extended its cloud commitments with Google and Amazon Web Services through 2029 for a combined total of over $1.4 billion.
Key points
Reddit warned its daily active unique visitor count of roughly 130 million could drop by…: Reddit warned its daily active unique visitor count of roughly 130 million could drop by a low double-digit percentage.
Regulatory changes to the European Union de minimis exemption hurt cross-border sellers a…: Regulatory changes to the European Union de minimis exemption hurt cross-border sellers and left Pinterest with flat European revenue.
Reddit secured long-term infrastructure by committing $880 million to Amazon Web Services…: Reddit secured long-term infrastructure by committing $880 million to Amazon Web Services and $580 million to Google through 2029.
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Oct 30 : Shares of Reddit and Pinterest fell in premarket trading on Friday, after Reddit warned that Google's AI search features could shrink its user base, and Pinterest forecast weak fourth-quarter revenue.
Reddit shares tumbled 23 per cent, while Pinterest slumped 8 per cent.
Here are more details:
• Reddit said search engine referrals fell by more than 1 million on average each week in October
• Total daily active unique visitors could fall by a low double-digit percentage in the fourth quarter from about 130 million if referral traffic continues to fall, Reddit added
• JPMorgan analysts said the expansion of Google's AI Overviews and AI Mode, along with changes to how machine-translated content ranks, has pushed search traffic down
• A reset in expectations is appropriate, and the near-term outlook is increasingly clouded, Piper Sandler analysts added
• Reddit said in a filing it had extended its cloud services agreements with Amazon Web Services and Google through 2029, committing to spend $880 million and $580 million, respectively, over three years
• Pinterest's third-quarter revenue of $1.17 billion…
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