According to Steve Huffman, CEO of Reddit, social networking site users fall into two categories: seekers and scrollers.
Scrollers are the ones who visit Reddit's main feature, which is community discussion and interaction on subjects they are interested in. Then there are the Seekers, who may enter their precise search term into Google Search and add "Reddit" at the end to discover genuine guidance and viewpoints from actual people.
Reddit Targets Information Seekers
The Seekers are the target audience for Reddit Answers, the company's AI-powered chatbot that presents exact responses and summaries of previous Reddit posts. Additionally, initial results indicate that it is already gathering momentum. Reddit CEO Steve Huffman stated Thursday during the company's first-quarter earnings call.”
“We haven't developed a product for them until very recently. Those folks are not currently visiting Reddit in search of a community. They are seeking an explanation. I also believe that we can better solve the use case that the user is presenting to us by acknowledging it.”
During the call, Reddit said that its Answers platform has achieved one million weekly active users since its December beta release. Last month, Reddit extended Answers into Australia, the United Kingdom, Canada, and India.
Enhancing User Onboarding
Currently, in testing, the functionality exists as a stand-alone experience in the app's menu bar. Reddit intends to incorporate Answers into the platform further as 2025 approaches. According to Huffman, the most clear method to accomplish this would be to incorporate Answers into the main search field. This would enable users to enter a complete question instead of just a few phrases.
The CEO added that the business is looking into ways to incorporate Answers into the user journey's start. He said:
“If you're a new user using Reddit for the first time, you use Answers to check what's available and discover that Reddit most likely offers what you're looking for.”
“An additional entry point for Answers would be through external search, which can help users obtain a shorter or easily understood version of the response on Reddit.”
Search Dependence Concerns Rise
A change in the Google Search algorithm in the fourth quarter of 2024 created some "volatility" with Reddit's user growth, which alarmed investors at the time, even if the company's profitability beat projections.
Huffman said we want people to find Reddit content in Google Search because we're an open platform. Being honest increases visibility and awareness. It can also lead to unpredictability, and because we've already seen a couple this year, we expect some setbacks from Google. This is normal for any year, but the near future may be more difficult than usual because the Search ecology is still undergoing major changes.
The company announced a 31% YoY rise in daily active unique users, adjusted earnings per share of $115.3 million, and sales of $392.4 million, up 61% year over year. Reddit projects revenue of $410 million to $430 million and adjusted earnings per share of $110 million to $130 million for the second quarter.