Reddit, the beloved home of internet discussions, is moving forward with its use of the AI-powered ChatGPT chatbot “Answers.” This change is intended to help the app reach a much larger audience outside of its usual niche home with the scrollers. With CEO Steve Huffman at the helm, Reddit is set to redefine how users engage. The platform is particularly designed to meet the needs of those who are actively seeking out information.
In a recent earnings call, Huffman revealed his big vision for their 2025 execution. Our team is going to weave “Answers” throughout the UX, leverage it collaboratively! This bold new effort grows out of the successful beta launch of the chatbot last December. It’s already brought on one million weekly active users! We would like users to type long, natural language questions right into the big search box. This new tactic is quite a bit deeper than just restricting them to a handful of keywords.
Reddit classifies its users into two categories: scrollers and seekers. Where scrollers scroll to pass time and find inspiration, seekers search to find the answer to a specific question. Huffman emphasized that the platform has historically catered less to seekers, stating, “Up until very recently, we haven’t built a product for them.” He went on to explain that these users are not using Reddit to find community, but instead to find specific answers.
“Those users are not coming to Reddit for a community in that moment. They’re coming for an answer,” Huffman noted. Reddit is taking a notable strategic turn with its ownership of “Answers”. To that end, they’re eyeing expansion into new markets like Australia, the U.K., Canada, and India.
As part of this new direction, Huffman envisions that a user new to Reddit should be able to utilize “Answers” effectively. “So you’re a new user opening Reddit for the first time, using Answers to see what’s in Reddit and learn that Reddit almost certainly has what you’re looking for,” he explained.
The company’s recent explosive growth has been a testament to this strategic shift. Reddit projected an incredible $392.4 million in revenue for last year, a 61% YOY increase. Additionally, daily active unique users climbed to 108.1 million, a 31% jump over the previous year. User growth at Reddit was impacted by some volatility from a Google Search algorithm change in Q4 2024. Despite the major contraction, the company projects its revenue at $410 million and $430 million for the second quarter.
Huffman made stakeholders optimistic by reiterating their commitment to staying in the foreground of search engines. “We’re an open platform, and we want people to find Reddit content in [Google] Search,” he stated.
For almost a week after the announcement of these changes, Reddit’s daily active user growth percentage was off the charts. As expected, the company’s stock shot up in after-hours trading, far exceeding analyst expectations.