Why is Reddit profitable? The rocky history of forums, according to Alex Cook, a moderator for the Gaming Subreddit
This isn’t something that is just bellyaching. There are questions about the business of forums. Reddit isn’t profitable. Reddit has never been profitable. As Dave Lee points out, theIPO risk factors section of the website are longer than those of Facebook or Twitter.
“Reddit has a very rocky history,” says Alex Cook, a volunteer moderator (or “mod” in the community’s lingo) for several gaming subreddits. “I see it as a very risky investment at best.”
The company’s move to begin charging for access to its interface used by software developers to draw on user posts and other content angered some users. The fees led to several popular independent Reddit mobile apps shutting down, and protesting users temporarily closed some forums on the service for weeks in a failed effort to pressure the company into reversing course.
Do IPO Shares Hate Redditors? “Sometimes you don’t want to hurt anyone,” warns Rat, a mod for Stardew Valley
IPO shares won’t soothe lingering frustration, says a user who goes by Rat and volunteers as a mod for the r/StardewValley video game community. This could be their attempt at a pizza party. Rat says, referring to a conciliatory gesture commonly offered to children.
The S-1 is filed with the SEC before a company goes public. The data includes revenue figures, risk factors, and data about the business. And it does send some signals. In this case: I see some meme stock shit.
And there was this person: “Loads puts into the put-cannon with malicious intent.” (For those not up on the parlance, they’re intending to bet the stock goes down. I assume they are betting a lot given the use of a put-cannon. I want to imagine a scenario where one loads the put-cannon without intending to hurt anyone, but it hasn’t occurred to me.
Reddit shares: Is it a bad idea to give your own shares? How Reddits can help fight the rebellions against the IPO
The rebellions have made clear that there is more vulnerability to users of Reddit than other social media sites. The model of moderation has upsides, it means that the 60,000 mods are more familiar with their community than contractors would be. But Reddit doesn’t pay them and thus will have a harder time controlling them.
By offering shares to power users on Reddit, they are trying to mitigate that risk. They want to keep their own shares valuable, because they are shareholders. They would be less likely to cut off advertising revenue if they did that.
People who receive an email from a company that asks them to provide certain personal information may pre-register for the program. After three weeks, everyone will get an email saying if they qualified. There might be a wait list based on how many people sign up. The people who didqualify will get further instructions but they are not clear on what they will involve.
Source: A lot of Redditors hate the Reddit IPO
Why Have Reddit Shares Behaving Like a Community? Comment on Dan M. (Case Study of Partially) Dwarfied Halo Modifications
It is a nice thank you to people who have contributed. But let’s say you’ve sunk hours of your life into being a Reddit mod, and you’ve bought shares. You may lose money for the privilege of moderation. Fun!
The share program seems like a sham to Dan M., who received the offer. He says that the shares are not being given away for free.
For this story, I spoke to a lot of people who were positive about Reddit as a community. In an internet era of SEO garbage and social media engagement bait, it’s one of the bright spots. It’s a place where there are still enthusiasts and experts, where people can still learn things, says Dan. “While the rest of the internet is all a giant mess, Reddit still feels like a place where you can learn things and have fun,” says u/itsreallyreallytrue, who also received an invitation and is considering buying into the share program.
A viable business and a good community are not the same thing. There is not assurance that the business will scale for future growth, despite being founded in 2005, the S-1 notes. Most of Reddit’s revenue comes from advertising, but it hasn’t been very good at making money. That might be because of its laissez-faire approach to moderation; hate speech wasn’t banned from the site until 2020.
User engagement isn’t regular. spike in user engagement is the result of events such as the war inUkraine and the release of the video game Elden Ring. And a lot of users are passive, not even logged in. So targeting is a little trickier than it might be on, say, Instagram.
Source: A lot of Redditors hate the Reddit IPO
Sam Altman, CEO of OpenAI, and Steve “u/spez” Huffman, the CEO of the OpenAI website, wrote in a press release
And while Huffman now thinks that Reddit as a corpus of training data for AI is valuable, he let his board member Sam Altman siphon off Reddit data for free; Altman was, and still is, the CEO of OpenAI. Altman’s also Reddit’s third-largest shareholder and owns more than twice as many shares as Huffman. He was the CEO of the website for eight days.
The shares being offered to users are a bit suspicious since the value of which was not disclosed in the S-1. The Community Points were a gimmick; are the shares a gimmick, too?
Steve “u/spez” Huffman is to be blamed for these tricks. He has made a lot of strange decisions. He said that the price increase last year was a result of Elon Musk doing it. I am sorry, I mean X is doing with advertisers. His PR tour was a disaster.
The risk factor in the S1 may not be listed correctly. The S-1 says that Huffman is important to the management of our company and instrumental in the development of our technology and our strategic direction. His job depends more on the number of people who think “fuck spez” is a great slogan than on keeping the users happy.
I was told by Kevon that he was thinking of investing, and he thinks he was overpaid. (In the filing, Huffman is listed as making $193 million in 2023.) He was surprised Huffman made so much while the company was operating at a loss.