Reddit's latest results looked excellent. Revenue of $85 million beat expectations, daily active users rose 18% and weekly users 24%, driven overwhelmingly by traffic from Google.
Google, meanwhile, has spent a year rebuilding its search results around human-written content, complete with a dedicated section for it, because the open web has been overrun by machine-written filler.
Semrush data suggests Reddit was the single most cited domain by Gemini and Google's AI mode in May.
Google pays roughly $60 million a year for the privilege.
This is a spectacular arrangement for both parties and it is actively destroying itself.
The reason Reddit became valuable is that real people wrote honestly about products they had actually used.
The reason it is becoming worthless is that everybody now knows this, and brands have responded by seeding threads with recommendations engineered to be scraped into an AI overview.
Spend ten minutes in a productivity subreddit and the pattern is unmistakable: earnest lists of tools that always contain one obscure app nobody has heard of, posted by an account that exists to place it there.
Reddit is now deploying AI moderation to fight AI spam, which is an expensive way of describing a losing race.
The loop is closed and self-reinforcing.
Bots write posts, Google's crawler treats them as authentic human signal, AI summaries recommend the product, traffic and revenue flow back to whoever ran the operation, and the incentive to run more of them increases.
Google's historic power came from needing nobody in particular, because if one publisher walked away it could index a thousand others.
That is no longer the position. It now has a strategic interest in one forum staying healthy enough to keep supplying the raw material for its answers.
Reddit's leverage is equally illusory. Its internal search is poor enough that de-indexing would be suicide, and its licensing revenue depends on data that is getting less trustworthy every quarter.
Mutually assured destruction is the right description, and neither side is behaving as though it believes the missiles are real.
Some argue Google should simply buy Reddit.
It should not, and probably will not, because owning the forum removes the justification for privileging it, and Google already goes to considerable lengths to hold YouTube at arm's length for exactly that reason.
Ownership would also make manipulation easier, not harder.
What is actually happening is that the value of genuinely human writing is rising sharply at the precise moment both companies are spending it down for quarterly numbers.
There are still corners of Reddit that work, mostly the ones with nothing to sell.
That is not a business model. It is a preserve.
