Reddit flags volatile search referrals as US user growth slows

July 30 (Reuters) - Reddit RDDT.N said on Thursday that choppy search-engine traffic affected U.S. user growth in the second quarter, overshadowing an upbeat revenue forecast and sending its shares down around 13% in extended trading.

The social media company operates in a highly competitive market. Bigger rival Meta META.O through its Threads communities hub and new Forum app for Facebook Groups users appears to be directly targeting Reddit's core community model.

"Search referrals were choppy in the quarter, and traffic was more volatile later in the quarter, but the bigger picture is unchanged: the commercial business is strong," co-founder and CEO Steve Huffman said in a letter to shareholders.

Growth in its U.S. daily active unique visitors (DAUq) slowed to 6% in the second quarter from 7% in the prior three-month period. Global DAUq rose 18% from a year earlier to 130.3 million and was slightly higher than prior quarter growth.

COO Jen Wong told Reuters that "SEO headwinds" caused by changes in search algorithms "more than offset" the company's efforts in terms of user acquisition in the quarter.