The Google-Reddit Deal Nine Months In
In February 2024, Reddit entered into a licensing agreement with Google, reportedly valued at $60 million annually, granting Google access to Reddit’s extensive user-generated content for training its AI models. (PCMag)
Some Market Vantage clients have seen shifts in organic rankings based on Google’s preference for Reddit content. Many have been experimenting with advertising on Reddit, and it is unclear how the inclusion of Reddit results in Google searches may replace direct Reddit searches. This may be offset by ad opportunities once visitors jump to Reddit from Google SERP.
This partnership has had several other notable implications over the past nine months.
Impact on Search Engine Results
Google’s Enhanced Search Results
Google has integrated Reddit content more prominently into its search results, leveraging the licensed data to provide users with richer, community-driven insights. This enhancement aligns with users’ tendencies to append “Reddit” to their queries to obtain more nuanced information. (New York Magazine)
Exclusivity and Other Search Engines
The exclusivity of this deal has led Reddit to restrict other search engines, such as Bing and DuckDuckGo, from accessing its recent content. Consequently, these platforms no longer display up-to-date Reddit links, potentially diminishing the comprehensiveness of their search results. (The Verge)
Financial and Strategic Outcomes for Reddit
Revenue Generation
The agreement has provided Reddit with a significant revenue stream, bolstering its financial position and supporting its strategic initiatives, including its initial public offering (IPO) in March 2024. (HubSpot Blog)
API Policy Revisions
Following the deal, Reddit revised its API policies, imposing higher fees on third-party developers and restricting free access. This move aims to monetize Reddit’s data more effectively, though it has sparked controversy among developers and users. (Wikipedia)
Broader Industry Implications
Shift Toward Exclusive Data Licensing
The partnership exemplifies a trend where AI companies secure exclusive rights to valuable datasets, potentially leading to a more fragmented internet landscape and raising concerns about the openness of web information. (Lifewire)
Challenges for Competing Search Engines
Without access to Reddit’s real-time data, other search engines may struggle to provide equally comprehensive results, potentially impacting their competitiveness and user satisfaction. (New York Magazine)
In summary, the Google-Reddit licensing deal has enhanced Google’s search capabilities and provided Reddit with substantial financial benefits. However, it has also contributed to a more exclusive and fragmented internet environment, affecting the dynamics of data accessibility and competition among search engines.
