Reddit considers AI search to transform content discovery
Reddit CEO Steve Huffman has announced plans to test artificial intelligence (AI)-powered search results on the platform later this year. During the company's second earnings call as a public entity, Huffman said, "Later this year, we will begin testing new search result pages powered by AI to summarize and recommend content." The aim is to help users "dive deeper into products, shows, games and discover new communities on Reddit."
Reddit sees search feature as revenue opportunity
Huffman acknowledged that Reddit's search feature has been static for a significant period. However, he views this as an opportunity to attract new users and potentially generate substantial advertising revenue. "But now we will unlock the door for new use cases, new types of subreddits that can be built that may have exclusive content or private areas, things of that nature," Huffman said, hinting at exploring non-advertising revenue sources such as paywalled subreddits.
OpenAI partnership key to Reddit's AI features
Reddit's partnership with OpenAI, established in May, is expected to play a crucial role in implementing these AI-powered features. The agreement allows Reddit to utilize OpenAI's large language models and grants OpenAI permission to use Reddit's data. Huffman also mentioned a similar deal signed with Google earlier this year, further bolstering the platform's AI capabilities.
Reddit's AI-powered translation feature expands
Huffman highlighted the success of Reddit's AI-powered language translation feature during the call. He reported that France is one of its "fastest growing countries," and revealed plans to expand the translation feature to German, Spanish and Portuguese. This move is expected to further enhance user engagement across diverse linguistic communities on the platform.
Reddit surpasses Wall Street estimates in Q2
Reddit reported 342.3 million weekly active users for the second quarter, marking a 57% increase from the previous year. The company also reported revenue of $281.2 million in Q2, surpassing Wall Street estimates of $253.8 million. These figures reflect Reddit's robust growth and strong financial performance since going public earlier this year.
Reddit emphasizes transparency in data usage
Reddit has been exploring new business expansion strategies, including multi-million-dollar licensing deals. The company has also blocked search engines that aren't paying for its content. "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 said. "We want to know where Reddit data is going and what it's being used for, and so those are the terms of engagement."
