* COO says advertiser count in the second quarter rises 70%

* Quarterly U.S. user growth slows due to search algorithm

changes

* Reddit ( RDDT ) says its quarterly revenue surges 61% to $805

million

(Rewrites throughout to include details about search engine

traffic, US user growth)

By Jaspreet Singh

July 30 (Reuters) - Reddit ( RDDT ) 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 through its Threads

communities hub and new Forum app for Facebook Groups users

appears to be directly targeting Reddit's ( RDDT ) 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.

Still, product improvements are helping convert

lower-engagement visitors from search engines into loyal app

users, she said.

Reddit ( RDDT ) also forecast slower revenue growth in the third

quarter. However, the forecast range of $860 million to $870

million was above LSEG-compiled analysts' average estimate of

$829.1 million.

"The company's advertiser growth in the second quarter was

70% year-over-year. So, we continue to onboard a lot more new

advertisers onto Reddit ( RDDT )," Wong said.

She added the growth was particularly strong among

mid-market and small- and medium-sized businesses and

international advertisers.

The company's AI-powered tools are designed to enhance

campaign performance by offering a library of successful ads,

generating Reddit ( RDDT )-specific ad copy, tracking visitor actions

after exposure and enabling interest and community-based

targeting within subreddit discussions.

Second-quarter revenue rose 61% to $805 million, beating

estimates of $730.4 million.

Reddit ( RDDT ) expects quarterly adjusted earnings before interest,

taxes, depreciation and amortization of $385 million to $395

million, above estimates of $369 million.