Reddit's cofounder said that at first the company felt like 'a homework assignment that got out of hand' rather than a business
www.businessinsider.com
Reddit's cofounder Steve Huffman said in its early days he filled up most of the site with content using different accounts until it got more users.

Now the social media platform is aiming for an IPO in the first quarter of 2024 with a valuation of $15 billion, and has been in talks with potential investors like Goldman Sachs and and Morgan Stanley, per Bloomberg.

    •  Semi-Hemi-Demigod   ( @Semi-Hemi-Demigod@kbin.social ) 
      65•4 months ago

      And what could they use the money to do? How much innovation has there been on Reddit since it was written? Fancier Reddit gold? A shitty redesign? Video hosting that doesn’t work? Image hosting so bad someone had to make totally separate website for it?

      •  Gamma   ( @GammaGames@beehaw.org ) English
        24•4 months ago

        Well they control the mobile apps now, which is most of the userbase. The redesign is still terrible but nobody has much of a choice about image hosting since it’s built-in.

        The only thing I can really think they “improved” is that the new gold system allows to be paid for your content:

        If you’re eligible for the Contributor Program and your content meets the requirements for monetization, you can receive cash from Reddit for the gold and karma you earn on qualifying contributions.

        But that’s definitely not going to help them be profitable lol

        •  Ech   ( @ech@lemm.ee ) English
          11•4 months ago

          if your content meets requirements for monetization

          “Requirements” being key there. The vast majority of even power users won’t end up getting paid with the system as it stands. If anything, it’s just there for people to give them credit for making it “possible”.

          •  survivalmachine   ( @survivalmachine@beehaw.org ) 
            3•4 months ago

            Which requirements are difficult to meet? The highest hurdles I see is receiving 10 gold in a 12-month period and making sure your content isn’t porn/gore/drugs. I think reddit blows, but this doesn’t seem like difficult-to-obtain goals for somebody trying to make some extra scratch.

              •  survivalmachine   ( @survivalmachine@beehaw.org ) 
                4•4 months ago

                Yeah, and while the country thing sucks, it’s at least a quick “yes/no” answer before you even start trying. This isn’t a deceptive lure like roblox, where they entice millions of kids to try to monetize their content, but make it exceptionally hard to actually make a profit or to even cash out (and even if you meet their ridiculous requirements, there is a huge imbalance of exchange rates when converting to and from a real currency to robux).

      •  TheFriar   ( @TheFriar@lemm.ee ) 
        1•4 months ago

        Look at a the way everything in tech is moving.

        We are in the age of of surveillance capitalism. It will make itself profitable with our data. Maybe identifying people, creating profiles about beliefs and personality, etc.

        What else could they possibly do? It’s proven profitable and that’s what they want.

    •  athos77   ( @athos77@kbin.social ) 
      29•4 months ago

      Rexxit had over $500,000,000 in revenue in 2022. It wasn’t profitable because spez spent money paying for all the infrastructure and bandwidth for multiple AI companies to harvest all of rexxit’s data, and because he’s constantly distracted by trying to incorporate the latest tech-bro trends into rexxit - rexxit crypto, rexxit NFTs, now he’s trying to figure out rexxit AI. He’s a breathtakingly incompetent CEO.

    •  BudgieMania   ( @BudgieMania@kbin.social ) 
      6•4 months ago

      I think there are a lot of extreme measures that would theoretically increase its profitability that they have not yet taken, most of which I have to assume are in the cards in the foreseeable future.

      Most of them are, of course, measures that would severely impact user experience in a very negative way, but it’s clear at this point that they are drunk on hubris and believe users will stay no matter what.

    •  janabuggs   ( @janabuggs@beehaw.org ) 
      1•4 months ago

      I don’t want to sound stupid but every time I hear this I don’t understand what they mean. If I don’t make enough money then I lose my possessions and house and certainly wouldn’t be able to afford servers. If it’s not profitable then why keep doing it? Does he just mean he doesn’t get massive bonuses? Clearly this word means something different to me.

    •  Lvxferre   ( @lvxferre@lemmy.ml ) 
      39•4 months ago

      I feel like Greedy Pigboy and Reddit Inc. as a whole deserve to be punished, for all that “my precious data! No, it is not the users’, IT IS MINE! MY PRECIOUS!” fiasco. Enshittification will happen either way.

    •  MxM111   ( @MxM111@kbin.social ) 
      7•4 months ago

      All other social media platforms are free.

      It is just there will be difference between users and customers (those who pays money to promote something or get data on users). And users are not customers.

      •  NuXCOM_90Percent   ( @NuXCOM_90Percent@lemmy.zip ) 
        9•4 months ago

        I mean, ignoring the balding neonazi dipshit for a moment:

        Twitter is more or less showing the path forward. They fucked up on the advertisement side, but it has clearly been demonstrated that there is a strong desire for users to be “power users”. Which is more or less what twitter ran on before. The idea that, because you have ten followers, you are just as important as Barack Obama.

        Reddit, coupled with Google fucking up their own shit, is rapidly losing the “best place on the internet to find user sourced information” badge. But there is definitely room for a subscription that either boosts user engagement (not sure how that would work) or provides corporate moderators so that individual people can have their own board about their Sonic OC or whatever.

        And then it becomes about converting those users into customers.

        •  Lvxferre   ( @lvxferre@lemmy.ml ) 
          9•4 months ago

          But there is definitely room for a subscription that either boosts user engagement (not sure how that would work)

          Swap “subscription” for “multiple small transactions” and you have the new gold system. So Reddit is already doing what you (and me, and everyone else) was predicting them to, we just didn’t know “how”.

          It’ll likely fail hard though, at least in the long run. For similar reasons as Digg failed.

  •  roguetrick   ( @roguetrick@kbin.social ) 
    47•4 months ago

    These valuations on companies that use cloud hosting for delivering video like reddit does is fucking imaginary. Reddit does not have enough of it’s own infrastructure to justify a $15 billion valuation. It’s ephemeral in the end.

      •  roguetrick   ( @roguetrick@kbin.social ) 
        23•4 months ago

        I get it, but like I said, that’s ephemeral. Compare that to say Meta or alphabet with YouTube. They have distinct advantages in serving their content that prevents them from completely losing out. Then you’ve got Reddit, who pays hosts that could decide themselves to spin up a competing service pretty quickly and already isn’t profitable due to those harsh hosting costs and isn’t particularly stand out in its advertising business compared to those two.

        •  JillyB   ( @JillyB@beehaw.org ) 
          2•4 months ago

          Well YouTube is worth far more than even this valuation, so that tracks. There have been many competing services (like the one we’re on, and Voat) but none of them have put a dent in Reddit’s ability to serve ads to a huge number of eyeballs. I wouldn’t invest in it but to suggest it’s valueless because they don’t own their servers is a stretch.

    •  Auzy   ( @Auzy@beehaw.org ) 
      7•4 months ago

      Also, its now a dogs breakfast too. Whenever I drop by there, a lot of the subreddits have become ultra right wing and weird or bot infested, where even the aussie subs are pro-gun zones now (despite very few people in AU actually giving a toss about guns).

      It went from being somewhat toxic to toxic all over. And the only people who will want to buy it, will be asking for more ads, more posts which are actually adverts, and more BS.

      There are so many alternatives to Reddit now too (like lemmy) which are likely to slowly eat into it’s market share

      •  roguetrick   ( @roguetrick@kbin.social ) 
        1•4 months ago

        Every single group you listed selfhosts and uses local data centers to reduce transit fees. It’s very important because it’s how you handle the costs on your business model. Ad revenue generally forces you to operate on tight operating margins. Compare that to another cloud hosting utilizing video provider that nearly sunk despite being quite popular: Vimeo. If you think this stuff is not important, see Twitch’s exit from Korea over transit fees.

    •  SatanicNotMessianic   ( @SatanicNotMessianic@lemmy.ml ) 
      11•4 months ago

      Honestly, I don’t know on this one. It’s tough to guess on internet companies, especially social media.

      I think they’re facing pretty strong headwinds that have nothing to do with how we may personally feel about the company. Going off of memory, their valuation was slashed between their first talking about an IPO in 2022 and April-ish of 2023, which is when they started with the push towards monetization and which eventually led to shutting down the API to third party apps. I’m not sure where the $18B falls on that spectrum. I’m also not sure about the underlying metrics, like revenue per user, costs of acquiring new users, and so on. I don’t know if their growth has slowed or accelerated since the API change, but I also don’t think there’s a real competitor at this point (lemmy hasn’t reached critical mass and community fragmentation will probably mean it never will).

      On the other hand, I’ve felt since last April or so that the stakeholders are looking to exit. It really feels like spez mismanages the company and is just looking to cash out, take the billion or two and move on to his next thing, after which it will be run by a b-school type who will run it into the ground.

      All of which is to say I wouldn’t buy it for my retirement portfolio, but I also wouldn’t short it on opening day. I do suspect they’re underinvested in trust and safety and will run afoul of regulatory bodies, and Reddit is not the household name that Twitter is, so they’ll be easier to ban from markets.

      •  ignirtoq   ( @ignirtoq@kbin.social ) 
        17•4 months ago

        “Calls” and “puts” are types of contracts about buying/selling stocks (they aren’t the stock themselves but are centered around a given stock and its trading price, so they are called “derivatives” as they are “derived” from the stock).

        A put is a contract that allows the buyer of the contract to sell stock at an agreed upon price to the seller of the contract, regardless of the current trading price. They are used for a variety of reasons. In one usage, someone who is buying some of the stock at the current trading price may also buy a “put” on the stock at a slightly lower price. This way, they spend a little more money at the time of buying the stock, but if the trading price plummets, they can still sell it at that slightly lower “put” price and not lose too much money.

        In this case, the idea would be to buy a “put” (without buying the stock at the same time) when the buyer thinks the stock’s trading price is overvalued. Then when the price falls below the “puts” agreed upon value, buy the stock at the lower price and immediately invoke the contract to sell at the "put"s higher price.

      •  Deebster   ( @Deebster@programming.dev ) English
        9•4 months ago

        Short selling is when you borrow a stock, then sell that stock, then buy it back in time to return it. The idea is that you think it will go down, so you can buy it back at a discount and make a profit.

        A put is when you have the option of doing that – i.e. if it doesn’t go down you don’t have to do anything with the stock, and you’ve only lost the fee you paid for the put contract. It’s a way of hedging your bets.

  •  Rentlar   ( @Rentlar@lemmy.ca ) 
    34•4 months ago

    “I submitted most of the content for the first couple of months myself — I had all these different accounts… and sometime in August was the first day that I didn’t submit any content. Real users did. And literally every day since then, Reddit has been bigger than I ever thought it would be.” -Steve Huffman

    So there you have it, all of you single instance users, don’t fret! Reddit didn’t become popular in a day, it was mostly Spez posting to himself.

    As far as the IPO goes, I’ve left Reddit so it can succeed or crash and burn, I care little at this point.

  •  Mongostein   ( @Mongostein@lemmy.ca ) 
    27•4 months ago

    Ok there. I finally deleted my account for realsies.

    I keep going back to check out their Marvel discussions, but tell myself not to log in and engage. The community around that is bigger, definitely, but man… so full of dickheads. Thanks for being nicer, Lemmy users.

  •  ulkesh   ( @ulkesh@beehaw.org ) English
    19•4 months ago

    And I sincerely hope anyone that invests in Reddit loses everything they put into it. The company deserves to die for the bullshit they did last year. It’s past time to move on.

    •  marco   ( @marco@beehaw.org ) 
      2•4 months ago

      A few years ago I would have bought some stocks to support them … Now, I’d counsel anybody to stay away from that stock because the company could further alienate and lose most of their active users at any time.