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Reddit Partners With Google on New Data Sharing Deal

Google’s making a strategic move to shore up its Search business, via a new deal with Reddit that will give Google exclusive access to Reddit’s data for use in Search and within its generative AI projects.

Late last week, reports circulated that Reddit had signed a new deal to sell its data for $60 million per year to “an unnamed large AI company”. Many (myself included) assumed that this would be OpenAI, as part of its broader push to challenge Google’s search dominance, but it turns out it was actually Google, with the deal set to bring Reddit info into both Search and its evolving Gemini models.

As per Google:

Over the years, we’ve seen that people increasingly use Google to search for helpful content on Reddit to find product recommendations, travel advice and much more. We know people find this information useful, so we’re developing ways to make it even easier to access across Google products. This partnership will facilitate more content-forward displays of Reddit information that will make our products more helpful for our users and make it easier to participate in Reddit communities and conversations.”

Which is a clever move, considering that, as Google notes, people have been increasingly appending their Google searches with “site:www.reddit.com” in order to get more direct user experience notes and human insight, especially as on-site product reviews have become increasingly questionable.

Google example

As you can see in this example, by searching Reddit, you can get forum links that provide real, human conversations about products and their features, all up and downvoted to highlight the most relevant matches.

That’s a significant value add for search, and in the age of generative AI, where more and more product review sites are employing AI bots to create harder-to-detect fake endorsements, the value of that could become even more significant.

“Google now has access to Reddit’s Data API, which delivers real-time, structured, unique content from their large and dynamic platform. With the Reddit Data API, Google will now have efficient and structured access to fresher information, as well as enhanced signals that will help us better understand Reddit content and display, train on, and otherwise use it in the most accurate and relevant ways.”

Direct integration with Google will also benefit Reddit, in helping to boost awareness of Reddit’s forums across 100,000 niche topics. In this sense, this is a deal that could never have been done in the past, because Reddit once hosted the most chaotic, controversial communities, and was a core facilitator of some of the worst aspects of web interaction, including hate speech, gore, revenge porn, etc.

But that all changed back in 2020, when Reddit made sweeping changes to its rules, which resulted in the immediate expulsion of thousands of its most controversial subreddits. The goal back then was to redefine Reddit interaction, in order to maximize its business potential, with a view to a future IPO, and this new Google deal is a solid endorsement of that approach.

And while an extra $60 million per year won’t be a revolutionary boost to the company’s overall intake (Reddit reportedly brought in $800 million in ad revenue last year), the additional exposure benefits could enhance the deal’s value, making it an important strategic initiative.

And really, Reddit’s data doesn’t even have to appreciate. For a new company buying in, as a challenger to Google, you would assume that the value here would be that Reddit’s growth could up the value of its dataset over time. But with Google, it doesn’t even need that, it just needs Reddit to keep providing it with all of its information as a supplement to Search, fending off any potential competition with that insight.

It’s an interesting partnership, and a significant endorsement of Reddit’s evolving business direction. The platform is still reportedly planning its IPO next month, and it’ll be interesting to see what it can reveal about its partnership with Google before then.   

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