This article is interesting, but for me the main takeaway is that Reddit is not currently profitable? Any idea why? Is it primarily infrastructure costs?
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808 sats \ 8 replies \ @0xIlmari 14 Jun 2023
My guess is they're part of the debt-fueled pathological system borne out of a decade of free money.
All growth, no profit, requiring a constant stream of new debt to exist.
A recession is the reckoning for companies that overextended in this way. Those that start to reach for actual yield more aggressively in these times reveal their cards this way.
Reddit is bleeding potential ad money through third party apps and clients and needs to plug that hole to survive.
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283 sats \ 4 replies \ @kepford 14 Jun 2023
Yep, we are going to keep seeing more of this as easy money dries up.
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106 sats \ 3 replies \ @mudbloodvonfrei OP 14 Jun 2023
There are companies that I look at (like monday.com) and I instantly think "you are clearly a fiat-fuelled one-hit wonder". Reddit has been around since like 2005, they benefit from easy money, sure, but they weren't exactly the first company that came to mind when thinking of tech bubble excess.
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282 sats \ 2 replies \ @chungkingexpress 14 Jun 2023
As an aside, do you think Monday.com has a future? I use it for some planning and would be open to an alternative.
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53 sats \ 0 replies \ @mudbloodvonfrei OP 14 Jun 2023
I've never used it TBH, so I don't know, but productivity tools in general are well-tread ground. There's a bunch of open source options. I understand how a company can make a profit by providing such software as a service, but having an IPO at the valuations they did seemed so bizarre to me. Or that a VC would fund something like that in the first place.
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0 sats \ 0 replies \ @ibz 15 Jun 2023
I use plain text files for planning, but maybe I am not planning complex enough stuff, who knows...
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282 sats \ 1 reply \ @OriginalSize 14 Jun 2023
A side-effect of not caring about third-party apps for so long is that they could be ignorant of how horrible their newer UIs are.
I used to use their UI on mobile but switched to RIF and used it even more once I made that change.
Perhaps the thing we want as users doesn't make a business, but yeah I'd sooner pay $8 to reddit than Twitter.
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0 sats \ 0 replies \ @RdioActiv 15 Jun 2023
As long as Reddit allows subs to arbitrarily permaban users on a whim, I will never give them a damn sat.
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106 sats \ 0 replies \ @mudbloodvonfrei OP 14 Jun 2023
I completely agree that we're going to see a ton of malinvestments implode in the near term. And I'm not surprised that Reddit would be pressured by VC backers to increase profitability without much thought to how that would affect the sustainability of the platform. What I'm surprised by is that they're not profitable at all, at least according to the article.
You make a solid point about the 3rd party apps though. I guess those must be a major drain. Didn't think of that. Which is a perfect segue into...
...why am I asking this question? I think social media has the potential to bring tremendous value to the world, but has in practice mostly disappointed. (I actually never saw any of the toxic behavior and spamming that people mention with regards to Reddit, but I didn't participate actively and I only turned to very niche subs for specific info). Stacker News has been a very refreshing experience. I've learned a lot from interacting with people here, and I'm only a few weeks in.. I just want to believe that it's sustainable, that someone can build a platform like this, that provides value to people and allows the owners to turn a profit, but without having to make the kind of decisions that ultimately undermine the well-being of both.
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451 sats \ 3 replies \ @kepford 14 Jun 2023
Honestly, I'm more surprised to hear that a social site like Reddit makes a profit. I've never got the business model knowing how bloated companies like Reddit can be due to the venture capital model.
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53 sats \ 0 replies \ @mudbloodvonfrei OP 14 Jun 2023
I agree that venture capital is a major distorting factor in the economy. It is definitely a fiat-driven phenomenon. But still...
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0 sats \ 1 reply \ @gmd 15 Jun 2023
Why are so many big newsletters profitable but not Reddit? It seems like targeting for ads would be precise based on the subreddit topic...
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0 sats \ 0 replies \ @kepford 15 Jun 2023
Newsletters are very different. You dont need servers, devs, qa, HR for a email newsletter.
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374 sats \ 2 replies \ @kr 14 Jun 2023
does anyone know if reddit is still planning on going public?
Reuters said in February that they were targeting a 2H 2023 IPO, but I haven’t heard much since then.
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53 sats \ 0 replies \ @mudbloodvonfrei OP 14 Jun 2023
Apparently they're owned by a company called Advanced Publications, so I guess it's not technically VC-backed. I wanted to look at their balance sheet for some clues but it's privately held.
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106 sats \ 0 replies \ @mudbloodvonfrei OP 14 Jun 2023
Most of the articles I read in recent days suggested that API pricing changes are to increase profits in the run up to the IPO, but I didn't find anything more concrete than that.
In any case, an IPO in this market is somewhat unusual. Either there's real value that the investors want to unlock, or they want to dump before things get real bad.
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149 sats \ 0 replies \ @k00b 14 Jun 2023
With the exception of Facebook, it seems like most social media companies struggle to make a profit. After the founders' early liquidation event and proximity to wealth, it seems like they became political thot leaders which isn't really consistent with their original vision of the internet being a free/anonymous place to speak your mind.
I'd also blame the ad driven business model because it forces you to make decisions oriented toward the lowest common user - so you can get more eyeballs on ads. It's a race to the bottom both in terms of cost and in terms of the target user.
I'd suspect they're also overstaffed and unproductive and have a hard time making decisions beyond the color of the latest bike shed - which to be fair is normal.
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61 sats \ 1 reply \ @kr 14 Jun 2023
good question, since all their moderators are unpaid that should be an advantage nudging them towards their goal of turning a profit.
facebook, snap, and twitter all have to pay for their content moderation staff.
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475 sats \ 0 replies \ @mudbloodvonfrei OP 14 Jun 2023
Exactly! I just assumed they were trying to squeeze more profit in a downturn, it never would have occurred to me that they've been operating at a loss this entire time.
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10 sats \ 0 replies \ @torrit 15 Jun 2023 freebie
Free Speech and Privacy focused Reddit (Tor Only)
We are waiting 4 you to come home and not use these hivemind platforms.
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126 sats \ 0 replies \ @DeltaClimbs 15 Jun 2023
They don't actually produce anything.
People forget, it's hard to generate value in the long run with something that costs next to nothing.
This is also why StackerNews is a lousy producted and a RETARDED investment, ESPECIALLY at a $25m valuation -- only fiat LARPers could make that sort of investment. 🤡🤡🤡
Why do you expect to write a few lines of code that can be easily duplicated and make billions in profit? Anyway, all of these legacy, closed protocols will be obliterated by Nostr and the profit will be found by people who understand and enhance their user's ability to engage in useful, real world enterprise.
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25 sats \ 5 replies \ @byzantine 14 Jun 2023
expenses > revenue
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604 sats \ 4 replies \ @mudbloodvonfrei OP 14 Jun 2023
Sure, but why? Mismanagement? Hiring too many expensive developers? Overpaying for espresso machines on every floor at HQ?
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25 sats \ 0 replies \ @BBitcoinUSA 14 Jun 2023
A lot of bots, fake traffic, intentionally vague and incomplete answers, eroding trust and loyalty, none of which translate into actual dollars of profit. If the success of the business model relies on maximizing time spent on the site, and it’s users have no skin in the game, the only way it will remain a going concern is if the information it provides confuses the hell out of you at first thereby tricking you into spend more time on the site searching for an answer to your question, thereby resulting in more attractive monthly KPIs on which to base its ad pricing.
At worst a giant money laundering operation, at best a mediocre and lackluster product.
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25 sats \ 2 replies \ @kepford 14 Jun 2023
Yes
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10 sats \ 1 reply \ @mudbloodvonfrei OP 14 Jun 2023
The bubble is way bigger than I thought... My whole adult life has been a lie haha
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25 sats \ 0 replies \ @kepford 14 Jun 2023
Glad to see your eyes are opening. One reason so many "smart" and successful people oppose bitcoin and other changes is because they have been made wealthy by the status quoe.
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20 sats \ 0 replies \ @1EastSideTony 14 Jun 2023
Fuck Reddit! HIS NAME WAS AARONSWARTZ
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0 sats \ 0 replies \ @zuspotirko 14 Jun 2023
Keeping all this data is expensive and they chose the very userbase that is the most allergic to adsor buying microtransations.
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0 sats \ 0 replies \ @mayuworldwide0001 14 Jun 2023 freebie
There’s ain’t no idea until they notify their policy…
0 sats \ 0 replies \ @nkmg1c_ventures 14 Jun 2023
It's a propaganda / censorship platform, it doesn't need to make money
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