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How Reddit plans to make money through advertising

201 points by elsewhen 8y ago

deleted 8y ago
[deleted]
aerialcombat 8y ago
How good of a job are they doing at advertising? Advertising is tough since it has to satisfy both the ad buyers and the users. It’s very easy to turn off one or the other side.
- unixhero 8y ago
  As a user, I like the promoted "posts". In that case, well. I sometimes click the ads! As a user I hate the banners. I don't see them of course, because I ad block. I would never click them.
- mbo 8y ago
  Unlike, say, Facebook, I hate the ads that Reddit presents to me. They're often poorly targeted, or flat-out obnoxious.
  - code_duck 8y ago
    Reddit has shown me the same ad about online mental health counseling every day for 4 months. “Because I deserve it”.
    - stevekemp 8y ago
      Ditto, and something about a crappy IDE for golang.
    - deleted 8y ago
      [deleted]
    - patorjk 8y ago
      Ditto for me too, and I only keep an eye on 2 subreddits: /r/baltimore and /r/maryland, so I have no idea why they're targeting me with that ad. Maybe it's because general news headlines can be grim? However they're doing it, it's not done well.
    - gkya 8y ago
      I started enjoying Reddit when I unsubscribed from all subreddits, i.e. having 0 subscriptions. What I did instead was to group all of them in various private multireddits inspired by USENET, so I have comp, emacs, langlearn, laugh, etc. Thus when I'm just checking to see if a notification I'm expecting is there, there is no links that can immediately distract me on the front page. This saves me countless hours, and combined w/ opting out of all personalisation [1], of the new profile overview and of the fuckup^H^H^H^H^H^Hredesign, and with strict JS and content blocking, and Redirector extension, it becomes bearable. One thing Reddit should note is that people are there for the communities. If there was sth. identical but run by a foundation or NGO, I'd jump there and delete my reddit account once the important communities are migrated. [1] https://www.reddit.com/personalization https://www.reddit.com/personalization
- conradfr 8y ago
  The have recently quietly introduced video ads, isn't that great?
MoronInAHurry 8y ago
By turning their site into this: https://i.imgur.com/TtVAiMN.jpg https://i.imgur.com/TtVAiMN.jpg That's what a new visitor to reddit.com would see, as of about a month ago.
- mynewtb 8y ago
  Their mission is making short-term money to satisfy the venture capitalist investors. Anything else is unimportant.
  - codetrotter 8y ago
    They’ve been around since 2005, though. 13 years.
    - Deimorz 8y ago
      They didn't take a significant amount of VC until fairly recently though. $50M in Sept 2014, and then $200M more about a year ago: https://www.crunchbase.com/organization/reddit https://www.crunchbase.com/organization/reddit
    - EpicEng 8y ago
      And they make no money, recently took on a truckload of VC money, and people want out.
- personlurking 8y ago
  I just hope they always allow users some way to switch to the old Reddit as an option. I had to uncheck the second box in the beta options, at the bottom of preferences. https://i.imgur.com/xnHdFuE.png https://i.imgur.com/xnHdFuE.png
  - iKSv2 8y ago
    "I just hope they always allow users some way to switch to the old Reddit as an option" Pretty much the only thing why I am still using Reddit via PC in addition of mobile app (third-party)
smithmayowa 8y ago
Compared to the companies started at similar times which followed the grow fast path but ultimately failed and looking at the slow but steady growth path reddit has been allowed to follow I wonder why ycombinator does not accept more companies like reddit(slow but steady growth companies) into their accelerator, I mean being a founder of one such company I think that will be awesome .
- hkmurakami 8y ago
  Look at how early Reddit was in YC’s history. QED.
- Deimorz 8y ago
  reddit grew fast and was acquired just over a year after it launched (which was in June 2005): https://techcrunch.com/2006/10/31/breaking-news-conde-nastwired-acquires-reddit/ https://techcrunch.com/2006/10/31/breaking-news-conde-nastwi... I'm fairly sure YC's stake in it was bought out at that point.
  - minimaxir 8y ago
    YC's stake maybe, but Sam Altman followed on as a lead investor later: https://www.reddit.com/r/IAmA/comments/2hwr02/i_am_sam_altman_lead_investor_in_reddits_new/ https://www.reddit.com/r/IAmA/comments/2hwr02/i_am_sam_altma...
- flyinglizard 8y ago
  I don't think they intended to grow slowly. When they launched, there were similar aggregators already (digg?). I think they just kept the site under the radar long enough to become sort of a Craigslist for content. The design was antiquated and simple, userbase was limited but loyal. It just caught on from there, sometime around 2012-2014 when people wanted more content per unit of time invested (vs other social networks).
neotek 8y ago
"It's almost a little strange why marketers and advertisers are so apprehensive" about Reddit, said Amanda Parker, an account supervisor for digital marketing agency PMG. "Marketers chase scale, and Reddit has it. I think they have an old-fashioned view of who Redditors are." Pretty obvious I would have thought: as long as reddit remains the platform of choice for all the worst hate groups in America, the harder it will be for them to attract advertisers. If reddit insists on turning a blind eye to open and unchecked racism, calls for genocide, threats of physical violence, and bucketloads of other abhorrent content its co-founder describes as "valuable discussion", then that's the price they have to pay.
- weiming 8y ago
  I thought they did away with nearly most of those "famous" toxic subreddits.
  - slivym 8y ago
    A chain is only as strong as its weakest link. So whilst dead children might be off limits, /r/the_donald is still around despite the whole pizzagate shooting.
    - weiming 8y ago
      Wouldn't your statement be equatable with "Churches are still around despite some crazy attacking an abortion clinic"?
      - colordrops 8y ago
        Apparently we will gladly give away our rights and freedoms to hurt "the other side".
      - slivym 8y ago
        Churches aren't supported by ad revenue.
  - notatoad 8y ago
ksec 8y ago
For a site that had 3rd largest visitor count on the web, they only managed to make $100M. It is very hard for me to understand how Google and Facebook manage to make that much money. Because even if Reddit made 10x at 1 billion, it is still so far off from the other two.
- raverbashing 8y ago
  Also, they have a way of direct monetization with Reddit Gold (I wonder what % is that of their earnings)
  - lucb1e 8y ago
    I thought it was public information because there was also a "We reached X% of the daily gold goal!" banner, but I can't find a direct answer anywhere. It seems they never mentioned what that goal actually is. Here[1] is an attempt at an approximation in 2014, but I doubt it's accurate since it extrapolates the number of servers they run from 2012, how much it costs to run them, and doesn't consider (usually the biggest cost) employee wages and other things like rent. [1] https://www.quora.com/What-is-Reddits-income-from-daily-Reddit-Gold-sales https://www.quora.com/What-is-Reddits-income-from-daily-Redd...
- rand_r 8y ago
  It is astounding! This question merits a deeper analysis but here are my thoughts: First, Reddit (up until the recent redesign) functions as a community service. Reddit’s unprofitable nature is akin to other public service websites like Wikipedia. If you design a system simply to cover the costs of hosting fees and maintenance to provide the public with a great service, it shouldn’t be surprising to have great reach without making money. There are probably many useful website ideas that would only work unless funded by the government or donations. Second, it provides a place for discussion, and its anonymous threaded, commenting system promotes a structured and unfiltered, often viscous view of reality that scares marketing departments.
- aerique 8y ago
  They should never have switched away from Lisp.
shafyy 8y ago
Two thoughts as someone who is also building online community software: - I think there should be ways for community creators to monetize directly through Reddit. For example, allow community creators to add a donation/subscription button for really small amounts (e.g. 1$/month). - There is a growing opportunity in online chat communities. I guess that's why they also started experimenting with chat. There is a large but non-obvious difference between a forum and a chatroom, and as you might know from Slack vs. email, it's a significantly different vibe.
- johnmarcus 8y ago
  Checkout steemit.com.
  - shafyy 8y ago
    That's a great idea!
- CM30 8y ago
  Discord is basically the latter, aka Reddit for chat rooms/IRC equivalents. Slack is pretty close to that idea too. So if Reddit got into that market, there'd be real tough competition, even before taking the decentralised/federated stuff into account.
  - shafyy 8y ago
    No, it's not. Discord is made for gaming. If you would build a software for communities (for discussion in general), then you would add different features that don't make sense for Slack or Discord. It's a huge market with a lot of distinct use cases, and therefore can support a lot of similar players that focus on different use cases.
    - deyan 8y ago
      You seem knowledgable about the space. Mind sharing examples of such features, or where you feel Discord is lacking?
dalbasal 8y ago
To me Twitter is a sort of archetype of online, mass media businesses and some of the quirky side effects of "unicorn culture." At least at early stages, market value (and hence wealth of founders, investors & early employers) is some version of: (Likelihood of reaching $N bn revenue) X (N). The size of "N" is so open ended that a lot of traditional economic/finance logic of the kind Warren Buffet's generation used, it gets very abstract. When Google launched adwords, no one really knew what the potential was. The adwords team themselves understood the model (overture had already proven it) and probably knew it would get > $1bn. Past that, it was an unknown. That kind of a business had never existed at this scale before. Adwords is now $100bn pa, and growing. Facebook were in the same boat. The adwords/overture system didn't work on FB, and the size/value of the new market they were building was unknown. They knew it had potential, because of all the attention FB commanded, but how much was a guess. They waited until after IPO to find out. It turned out to be a lot, about $45bn currently, halfway to Google and gaining. We have already forgotten this, but when Facebook IPO-ed they hadn't really launched their mature business/advertising model. Revenue potential was still unknown and the range of possibilities was still very wide. Even on the premise that FB remained as popular as it was, anywhere from <$1bn to >$100bn was very possible. A huge range of possible outcomes. My belaboured point is that without the benefit of hindsight, the revenue potential of Google, Facebook, Twitter & Reddit is very detail dependant. Extrapolating from user/usage stats will only get you to within 100X. Anyway, in this kind of environment, the pressure is on to hit the top of your potential range. Take risks. Add costs. About 5 years ago, Twitter looked down this barrel. They 10X-ed their number of employees from 300-400 to 3,000-4,000 and cost base. Very little of this expansion was strictly necessary, to provide the service they were/are providing. Twitter was still Twitter @ 300 employees, more or less the same Twitter we have today. In an alternate world, they could have probably achieved >$1bn (currently @ $2bn) in annual revnue with just 500-1,000 or so employees. That's at the very top of the revenue/employee spectrum, and a recipe for one of the most profitable (in % terms) companies in the world. But, the current capital allocation economy does not have room for this sort of thing. Say it had been executed perfectly, $1.5bn/$0.5bn revenue/profit. They would have been worth less than they are currently, even though they'd be making far more profit. ...And Twitter didn't achieve the high end of their revenue potential. They've had mediocre results, with their advertising model. Still, just leaving open the possibility of Google/FB-like outcomes adds more to market cap than any level of profit. To put this in some numerical terms, Twitter spends 40% of it's 2.2$bn revenue ($1bn) on "Selling General and Administrative." This is more than twice "R&D" spending, which I assume means "making Twitter features." Reddit is in the same sort of boat (though they're userbase are more beligerant to this sort of thing), but scaled down. Investors are looking at Reddit's users & usage stats. DAUs, Times-on-sites... They are comparing it to FB, Google, Twitter. They are coming up with massive revenue results that might be achieved if only a good advertising model could be plugged in. What they are not looking it is "how much revenue would it take to profitably make reddit reddit" without necessarily targetting or leaving open the possibility of 100X more, at some point. it seems that for these kinds of companies, you are either Google/Facebook or you are a probability of becoming one. How profitable, popular or well liked you are by users doesn't matter, only (probability of X). The implications of this are big, and worrying for the future of media.
bionoid 8y ago
It seems to me like they are deliberately sacrificing the old userbase for a younger, "more naive" audience. I moderate a medium-sized subreddit, and I am seriously considering just closing the thing down, because I'm not going to be willing to adapt my bots to a work with a crippled API (its bad enough as it is). And let's be real here, the API will be crippled in the near future. Do you really think you'll be allowed to have an ad-free and tracking-free experience in a third-party app when they are done with this redesign project? * They went closed-source. * They removed the cloudsearch syntax from the search API. That may not seem very signifficant since very few people used it for their day to day redditing. But this was the only way of acquiring submissions older than the most recent 1000 for any given subreddit. Now there is no way to obtain old data, short of searching for random keywords and checking the date. I guess they don't want you to benefit from the aggregated data. * They abandoned iterative development to do a redesign-by-giant-committee. They are just pushing hostile shit and adjust if the complaints get too loud. That's a clear warning sign of things to come. * They rolled out the redesign on wide scale while it was not even close to alpha state. Half of the endpoints just straight up didn't work, and the remaining half was broken, like flairs, rules, css, and basically everything else. * The new system refuses to serve hosted image content to non-trackable clients (ie, you need img.png?sid=valid_sid to get image data). It also includes some rather hostile tracking technology, I forget the details but it was described in /r/privacy somewhere. At this point, it seems like the best thing to do is to set my subreddits to private so at least I am not contributing to their $100M revenue... but yeah, unfortunately it sucks for the community (and possibly other mods interested to keep the place running), hard decision to pull the trigger :/
- imglorp 8y ago
  Session replay tracking might be what you were thinking of. WTF. I've been on there for 10 years with 60k+ karma and I mod some subs also. I spend much less time on there now because of this crap. If I wanted FB or IG, I'd go there. https://old.reddit.com/r/privacy/comments/8mmybp/psa_the_reddit_redesigned_ui_is_worse_for_privacy/ https://old.reddit.com/r/privacy/comments/8mmybp/psa_the_red... Edit, ps. I've come to realize that Reddit is all about the community, not the software, and it's still there (for now). Recent example: one of the Marvel subs (/r/thanosdidnothingwrong) is going to ban half its members, ~200k, as a fun joke, and they're all excited about it. But if the UI and the monetization pisses them off enough, they will flee.
Waterluvian 8y ago
I want to think that they're ignorant of how Reddit rose and what happened to Digg but I'm skeptical that's the case. I think some people would rather kill something good than continue to not risk capitalising on it.
deleted 8y ago
[deleted]
yAnonymous 8y ago
How's Voat doing these days?
- q3k 8y ago
  Extremely toxic, as usual. https://q3k.org/u/0a15b5ec655a7153e7c37ee5062da48c57196af3f01ebe98acd2ad74a2564b68.png https://q3k.org/u/0a15b5ec655a7153e7c37ee5062da48c57196af3f0...
  - justsomedude43 8y ago
    That's your opinion.
    - q3k 8y ago
      What's your point?
      - justsomedude43 8y ago
        The point is that what is toxic and what isn't is a personal opinion, not an absolute truth.
    - d0lph 8y ago
      I tried to get into voat a month ago, it just looked like they moved all the racist posts from reddit to there. And they had this immense distrust of new people, if your account was created within the week and you posted something contrary they would downvote and comment only on that aspect.
    - deleted 8y ago
      [deleted]
  - swalsh 8y ago
    I totally respect the "Anyone is allowed to post anything, even if it's toxic". but when that's all the site is, or if I can't easily ignore it, it's not usable. The core audience of a forum set the culture. The core culture of voat were people angry they couldn't post their racist shit on Reddit.
vivan 8y ago
I do hope people start leaving Reddit. I love Reddit, don't get me wrong - you can find a community of people who are passionate about pretty much any topic. In the old world, each of these communities had their own disjointed forums - with Reddit they are all becoming centralised. If Reddit ever decides to be really evil they are very difficult to migrate away.
- kozikow 8y ago
  My problem with disjoint forums is that I can't get a digest of "top stuff happening across all subjects I am interested in". I have to visit each forum individually.
  - SauciestGNU 8y ago
    That's where some sort of syndication feed would come in, like RSS or ActivityPub.
  - CM30 8y ago
    That's where my federated Reddit alternative idea would come in. Each forum would be hosted by the community that uses it, and the centralised site would only act as a feed for them with a shared login system. Something like that seems like the next logical step after Reddit, and the way to make separate forums the main way of talking online again.
  - Cthulhu_ 8y ago
    Doesn't the err, multireddit (?) system work for that? I recall that was a thing on the old one at least.
    - gowld 8y ago
      The multireddit system doesn't work outside of reddit.
- swalsh 8y ago
  This redesign really makes me think of digg v4. The usability of the site is completely different, the inline ads. The biggest difference is they have 10 years of momentum. But if someone takes the old open source code base and starts "readit.com" i'll move.
codingdave 8y ago
I'm not sure this is a wise move - Reddit already has ads, which clearly haven't done enough for them. And there are legit reasons that ads are not as reliable of a revenue stream as they were in the past. Tweaking a failing business model won't produce a major shift in revenue. They need some real change if they ever want to be something different than what they are today. And what they are today is a mildly entertaining site with both good and bad impacts on our society. But reddit is not a great place to find paying customers, and therefore not a place I need more ad capabilities.
dredmorbius 8y ago
Former Reddit admin and automoderator creator Diemos has launched an alternative site, as-yet invite-only, Tildes (https://tildes.net https://tildes.net). I've been exploring that over the past few weeks, and am positively impressed. It's young yet and small, but shows promise, a sane and healthy community (sharply contrasting both Voat and Imzy in this regard), and some innovative and positive technical features, as well as an expressly member-driven, donor-supported, model. There's plenty of opportunity to go wrong, but the launch looks good so far. Reddit are certainly providing a golden window of opportunity. https://blog.tildes.net/announcing-tildes https://blog.tildes.net/announcing-tildes
- Crespyl 8y ago
  Tildes is still kind of finding its feet as a community, and there's a certain degree of navel-gazing as everyone tries to figure out exactly what kind of content and behavior is/isn't desirable. That said, the stated goals and driving philosophy seem sound, and the design of the site functionality seems to be on track to fix some of the core problems with reddit and similar sites. The concepts of nested groups with "bubble-up", content tagging, and multi-dimensional vote/tags on comments (when comment tags are eventually re-enabled) are all really appealing.
  - dredmorbius 8y ago
    Morbius's Law of New Media Platforms: The first topic of discussion shall be of the platform itself, what it is, what it isn't, and how its design shapes those roles. Add in healthy quantities of tugging from all sides trying to shape their own pet platform of choice. https://ello.co/dredmorbius/post/H4mXSK6nC35gLUucGdkrqw https://ello.co/dredmorbius/post/H4mXSK6nC35gLUucGdkrqw
- SauciestGNU 8y ago
  What do you consider to have been problems in relation to the Imzy community? Edit: this looks like a project with phenomenal potential that I would definitely be interested in using.
  - 8y ago
noddy1 8y ago
Anyone have any insight into why goog/fb haven't acquired reddit at this point? If they could get it for anything near the 1.8billion previous valuation surely they would just snap it up?
XalvinX 8y ago
What's wrong with $100,000,000? Why does everything have to be about money all the time anyways? And if it does have to be about money, then they should give the content creators and moderators their share, should they not? This is what's called a "slippery slope" ...
XalvinX 8y ago
I bet organizations such as the KKK would love to advertise on reddit, so hey, if they want to turn this into a money thing they should have plenty of monetization opportunities. My popcorn is in the microwave..... ;-)
pacifika 8y ago
Social media + sponsored content = fake news problem. It’s taking the trust and integrity of the platform and selling that in exchange for exposure to unverified content.
thinkingemote 8y ago
The reason marketeers don't like traditional advertising in Reddit is because they are getting their advertising for free by pretending to post as normal users. A room full of students can push any product, message or image. Its rampant in resdit. Why pay more for less reach?

201 points by elsewhen 8y ago

deleted 8y ago

[deleted]

How good of a job are they doing at advertising? Advertising is tough since it has to satisfy both the ad buyers and the users. It’s very easy to turn off one or the other side.

unixhero 8y ago
As a user, I like the promoted "posts". In that case, well. I sometimes click the ads! As a user I hate the banners. I don't see them of course, because I ad block. I would never click them.
mbo 8y ago
Unlike, say, Facebook, I hate the ads that Reddit presents to me. They're often poorly targeted, or flat-out obnoxious.
- code_duck 8y ago
  Reddit has shown me the same ad about online mental health counseling every day for 4 months. “Because I deserve it”.
  - stevekemp 8y ago
    Ditto, and something about a crappy IDE for golang.
  - deleted 8y ago
    [deleted]
  - patorjk 8y ago
    Ditto for me too, and I only keep an eye on 2 subreddits: /r/baltimore and /r/maryland, so I have no idea why they're targeting me with that ad. Maybe it's because general news headlines can be grim? However they're doing it, it's not done well.
  - gkya 8y ago
    I started enjoying Reddit when I unsubscribed from all subreddits, i.e. having 0 subscriptions. What I did instead was to group all of them in various private multireddits inspired by USENET, so I have comp, emacs, langlearn, laugh, etc. Thus when I'm just checking to see if a notification I'm expecting is there, there is no links that can immediately distract me on the front page. This saves me countless hours, and combined w/ opting out of all personalisation [1], of the new profile overview and of the fuckup^H^H^H^H^H^Hredesign, and with strict JS and content blocking, and Redirector extension, it becomes bearable. One thing Reddit should note is that people are there for the communities. If there was sth. identical but run by a foundation or NGO, I'd jump there and delete my reddit account once the important communities are migrated. [1] https://www.reddit.com/personalization https://www.reddit.com/personalization
conradfr 8y ago
The have recently quietly introduced video ads, isn't that great?

MoronInAHurry 8y ago

By turning their site into this: https://i.imgur.com/TtVAiMN.jpg https://i.imgur.com/TtVAiMN.jpg That's what a new visitor to reddit.com would see, as of about a month ago.

mynewtb 8y ago
Their mission is making short-term money to satisfy the venture capitalist investors. Anything else is unimportant.
- codetrotter 8y ago
  They’ve been around since 2005, though. 13 years.
  - Deimorz 8y ago
    They didn't take a significant amount of VC until fairly recently though. $50M in Sept 2014, and then $200M more about a year ago: https://www.crunchbase.com/organization/reddit https://www.crunchbase.com/organization/reddit
  - EpicEng 8y ago
    And they make no money, recently took on a truckload of VC money, and people want out.
personlurking 8y ago
I just hope they always allow users some way to switch to the old Reddit as an option. I had to uncheck the second box in the beta options, at the bottom of preferences. https://i.imgur.com/xnHdFuE.png https://i.imgur.com/xnHdFuE.png
- iKSv2 8y ago
  "I just hope they always allow users some way to switch to the old Reddit as an option" Pretty much the only thing why I am still using Reddit via PC in addition of mobile app (third-party)

smithmayowa 8y ago

Compared to the companies started at similar times which followed the grow fast path but ultimately failed and looking at the slow but steady growth path reddit has been allowed to follow I wonder why ycombinator does not accept more companies like reddit(slow but steady growth companies) into their accelerator, I mean being a founder of one such company I think that will be awesome .

hkmurakami 8y ago
Look at how early Reddit was in YC’s history. QED.
Deimorz 8y ago
reddit grew fast and was acquired just over a year after it launched (which was in June 2005): https://techcrunch.com/2006/10/31/breaking-news-conde-nastwired-acquires-reddit/ https://techcrunch.com/2006/10/31/breaking-news-conde-nastwi... I'm fairly sure YC's stake in it was bought out at that point.
- minimaxir 8y ago
  YC's stake maybe, but Sam Altman followed on as a lead investor later: https://www.reddit.com/r/IAmA/comments/2hwr02/i_am_sam_altman_lead_investor_in_reddits_new/ https://www.reddit.com/r/IAmA/comments/2hwr02/i_am_sam_altma...
flyinglizard 8y ago
I don't think they intended to grow slowly. When they launched, there were similar aggregators already (digg?). I think they just kept the site under the radar long enough to become sort of a Craigslist for content. The design was antiquated and simple, userbase was limited but loyal. It just caught on from there, sometime around 2012-2014 when people wanted more content per unit of time invested (vs other social networks).

neotek 8y ago

"It's almost a little strange why marketers and advertisers are so apprehensive" about Reddit, said Amanda Parker, an account supervisor for digital marketing agency PMG. "Marketers chase scale, and Reddit has it. I think they have an old-fashioned view of who Redditors are." Pretty obvious I would have thought: as long as reddit remains the platform of choice for all the worst hate groups in America, the harder it will be for them to attract advertisers. If reddit insists on turning a blind eye to open and unchecked racism, calls for genocide, threats of physical violence, and bucketloads of other abhorrent content its co-founder describes as "valuable discussion", then that's the price they have to pay.

weiming 8y ago
I thought they did away with nearly most of those "famous" toxic subreddits.
- slivym 8y ago
  A chain is only as strong as its weakest link. So whilst dead children might be off limits, /r/the_donald is still around despite the whole pizzagate shooting.
  - weiming 8y ago
    Wouldn't your statement be equatable with "Churches are still around despite some crazy attacking an abortion clinic"?
    - colordrops 8y ago
      Apparently we will gladly give away our rights and freedoms to hurt "the other side".
    - slivym 8y ago
      Churches aren't supported by ad revenue.
- notatoad 8y ago

ksec 8y ago

For a site that had 3rd largest visitor count on the web, they only managed to make $100M. It is very hard for me to understand how Google and Facebook manage to make that much money. Because even if Reddit made 10x at 1 billion, it is still so far off from the other two.

raverbashing 8y ago
Also, they have a way of direct monetization with Reddit Gold (I wonder what % is that of their earnings)
- lucb1e 8y ago
  I thought it was public information because there was also a "We reached X% of the daily gold goal!" banner, but I can't find a direct answer anywhere. It seems they never mentioned what that goal actually is. Here[1] is an attempt at an approximation in 2014, but I doubt it's accurate since it extrapolates the number of servers they run from 2012, how much it costs to run them, and doesn't consider (usually the biggest cost) employee wages and other things like rent. [1] https://www.quora.com/What-is-Reddits-income-from-daily-Reddit-Gold-sales https://www.quora.com/What-is-Reddits-income-from-daily-Redd...
rand_r 8y ago
It is astounding! This question merits a deeper analysis but here are my thoughts: First, Reddit (up until the recent redesign) functions as a community service. Reddit’s unprofitable nature is akin to other public service websites like Wikipedia. If you design a system simply to cover the costs of hosting fees and maintenance to provide the public with a great service, it shouldn’t be surprising to have great reach without making money. There are probably many useful website ideas that would only work unless funded by the government or donations. Second, it provides a place for discussion, and its anonymous threaded, commenting system promotes a structured and unfiltered, often viscous view of reality that scares marketing departments.
aerique 8y ago
They should never have switched away from Lisp.

shafyy 8y ago

Two thoughts as someone who is also building online community software: - I think there should be ways for community creators to monetize directly through Reddit. For example, allow community creators to add a donation/subscription button for really small amounts (e.g. 1$/month). - There is a growing opportunity in online chat communities. I guess that's why they also started experimenting with chat. There is a large but non-obvious difference between a forum and a chatroom, and as you might know from Slack vs. email, it's a significantly different vibe.

johnmarcus 8y ago
Checkout steemit.com.
- shafyy 8y ago
  That's a great idea!
CM30 8y ago
Discord is basically the latter, aka Reddit for chat rooms/IRC equivalents. Slack is pretty close to that idea too. So if Reddit got into that market, there'd be real tough competition, even before taking the decentralised/federated stuff into account.
- shafyy 8y ago
  No, it's not. Discord is made for gaming. If you would build a software for communities (for discussion in general), then you would add different features that don't make sense for Slack or Discord. It's a huge market with a lot of distinct use cases, and therefore can support a lot of similar players that focus on different use cases.
  - deyan 8y ago
    You seem knowledgable about the space. Mind sharing examples of such features, or where you feel Discord is lacking?

dalbasal 8y ago

To me Twitter is a sort of archetype of online, mass media businesses and some of the quirky side effects of "unicorn culture." At least at early stages, market value (and hence wealth of founders, investors & early employers) is some version of: (Likelihood of reaching $N bn revenue) X (N). The size of "N" is so open ended that a lot of traditional economic/finance logic of the kind Warren Buffet's generation used, it gets very abstract. When Google launched adwords, no one really knew what the potential was. The adwords team themselves understood the model (overture had already proven it) and probably knew it would get > $1bn. Past that, it was an unknown. That kind of a business had never existed at this scale before. Adwords is now $100bn pa, and growing. Facebook were in the same boat. The adwords/overture system didn't work on FB, and the size/value of the new market they were building was unknown. They knew it had potential, because of all the attention FB commanded, but how much was a guess. They waited until after IPO to find out. It turned out to be a lot, about $45bn currently, halfway to Google and gaining. We have already forgotten this, but when Facebook IPO-ed they hadn't really launched their mature business/advertising model. Revenue potential was still unknown and the range of possibilities was still very wide. Even on the premise that FB remained as popular as it was, anywhere from <$1bn to >$100bn was very possible. A huge range of possible outcomes. My belaboured point is that without the benefit of hindsight, the revenue potential of Google, Facebook, Twitter & Reddit is very detail dependant. Extrapolating from user/usage stats will only get you to within 100X. Anyway, in this kind of environment, the pressure is on to hit the top of your potential range. Take risks. Add costs. About 5 years ago, Twitter looked down this barrel. They 10X-ed their number of employees from 300-400 to 3,000-4,000 and cost base. Very little of this expansion was strictly necessary, to provide the service they were/are providing. Twitter was still Twitter @ 300 employees, more or less the same Twitter we have today. In an alternate world, they could have probably achieved >$1bn (currently @ $2bn) in annual revnue with just 500-1,000 or so employees. That's at the very top of the revenue/employee spectrum, and a recipe for one of the most profitable (in % terms) companies in the world. But, the current capital allocation economy does not have room for this sort of thing. Say it had been executed perfectly, $1.5bn/$0.5bn revenue/profit. They would have been worth less than they are currently, even though they'd be making far more profit. ...And Twitter didn't achieve the high end of their revenue potential. They've had mediocre results, with their advertising model. Still, just leaving open the possibility of Google/FB-like outcomes adds more to market cap than any level of profit. To put this in some numerical terms, Twitter spends 40% of it's 2.2$bn revenue ($1bn) on "Selling General and Administrative." This is more than twice "R&D" spending, which I assume means "making Twitter features." Reddit is in the same sort of boat (though they're userbase are more beligerant to this sort of thing), but scaled down. Investors are looking at Reddit's users & usage stats. DAUs, Times-on-sites... They are comparing it to FB, Google, Twitter. They are coming up with massive revenue results that might be achieved if only a good advertising model could be plugged in. What they are not looking it is "how much revenue would it take to profitably make reddit reddit" without necessarily targetting or leaving open the possibility of 100X more, at some point. it seems that for these kinds of companies, you are either Google/Facebook or you are a probability of becoming one. How profitable, popular or well liked you are by users doesn't matter, only (probability of X). The implications of this are big, and worrying for the future of media.

bionoid 8y ago

It seems to me like they are deliberately sacrificing the old userbase for a younger, "more naive" audience. I moderate a medium-sized subreddit, and I am seriously considering just closing the thing down, because I'm not going to be willing to adapt my bots to a work with a crippled API (its bad enough as it is). And let's be real here, the API will be crippled in the near future. Do you really think you'll be allowed to have an ad-free and tracking-free experience in a third-party app when they are done with this redesign project? * They went closed-source. * They removed the cloudsearch syntax from the search API. That may not seem very signifficant since very few people used it for their day to day redditing. But this was the only way of acquiring submissions older than the most recent 1000 for any given subreddit. Now there is no way to obtain old data, short of searching for random keywords and checking the date. I guess they don't want you to benefit from the aggregated data. * They abandoned iterative development to do a redesign-by-giant-committee. They are just pushing hostile shit and adjust if the complaints get too loud. That's a clear warning sign of things to come. * They rolled out the redesign on wide scale while it was not even close to alpha state. Half of the endpoints just straight up didn't work, and the remaining half was broken, like flairs, rules, css, and basically everything else. * The new system refuses to serve hosted image content to non-trackable clients (ie, you need img.png?sid=valid_sid to get image data). It also includes some rather hostile tracking technology, I forget the details but it was described in /r/privacy somewhere. At this point, it seems like the best thing to do is to set my subreddits to private so at least I am not contributing to their $100M revenue... but yeah, unfortunately it sucks for the community (and possibly other mods interested to keep the place running), hard decision to pull the trigger :/

imglorp 8y ago
Session replay tracking might be what you were thinking of. WTF. I've been on there for 10 years with 60k+ karma and I mod some subs also. I spend much less time on there now because of this crap. If I wanted FB or IG, I'd go there. https://old.reddit.com/r/privacy/comments/8mmybp/psa_the_reddit_redesigned_ui_is_worse_for_privacy/ https://old.reddit.com/r/privacy/comments/8mmybp/psa_the_red... Edit, ps. I've come to realize that Reddit is all about the community, not the software, and it's still there (for now). Recent example: one of the Marvel subs (/r/thanosdidnothingwrong) is going to ban half its members, ~200k, as a fun joke, and they're all excited about it. But if the UI and the monetization pisses them off enough, they will flee.

Waterluvian 8y ago

I want to think that they're ignorant of how Reddit rose and what happened to Digg but I'm skeptical that's the case. I think some people would rather kill something good than continue to not risk capitalising on it.

deleted 8y ago

[deleted]

yAnonymous 8y ago

How's Voat doing these days?

q3k 8y ago
Extremely toxic, as usual. https://q3k.org/u/0a15b5ec655a7153e7c37ee5062da48c57196af3f01ebe98acd2ad74a2564b68.png https://q3k.org/u/0a15b5ec655a7153e7c37ee5062da48c57196af3f0...
- justsomedude43 8y ago
  That's your opinion.
  - q3k 8y ago
    What's your point?
    - justsomedude43 8y ago
      The point is that what is toxic and what isn't is a personal opinion, not an absolute truth.
  - d0lph 8y ago
    I tried to get into voat a month ago, it just looked like they moved all the racist posts from reddit to there. And they had this immense distrust of new people, if your account was created within the week and you posted something contrary they would downvote and comment only on that aspect.
  - deleted 8y ago
    [deleted]
- swalsh 8y ago
  I totally respect the "Anyone is allowed to post anything, even if it's toxic". but when that's all the site is, or if I can't easily ignore it, it's not usable. The core audience of a forum set the culture. The core culture of voat were people angry they couldn't post their racist shit on Reddit.

vivan 8y ago

I do hope people start leaving Reddit. I love Reddit, don't get me wrong - you can find a community of people who are passionate about pretty much any topic. In the old world, each of these communities had their own disjointed forums - with Reddit they are all becoming centralised. If Reddit ever decides to be really evil they are very difficult to migrate away.

kozikow 8y ago
My problem with disjoint forums is that I can't get a digest of "top stuff happening across all subjects I am interested in". I have to visit each forum individually.
- SauciestGNU 8y ago
  That's where some sort of syndication feed would come in, like RSS or ActivityPub.
- CM30 8y ago
  That's where my federated Reddit alternative idea would come in. Each forum would be hosted by the community that uses it, and the centralised site would only act as a feed for them with a shared login system. Something like that seems like the next logical step after Reddit, and the way to make separate forums the main way of talking online again.
- Cthulhu_ 8y ago
  Doesn't the err, multireddit (?) system work for that? I recall that was a thing on the old one at least.
  - gowld 8y ago
    The multireddit system doesn't work outside of reddit.
swalsh 8y ago
This redesign really makes me think of digg v4. The usability of the site is completely different, the inline ads. The biggest difference is they have 10 years of momentum. But if someone takes the old open source code base and starts "readit.com" i'll move.

codingdave 8y ago

I'm not sure this is a wise move - Reddit already has ads, which clearly haven't done enough for them. And there are legit reasons that ads are not as reliable of a revenue stream as they were in the past. Tweaking a failing business model won't produce a major shift in revenue. They need some real change if they ever want to be something different than what they are today. And what they are today is a mildly entertaining site with both good and bad impacts on our society. But reddit is not a great place to find paying customers, and therefore not a place I need more ad capabilities.

dredmorbius 8y ago

Former Reddit admin and automoderator creator Diemos has launched an alternative site, as-yet invite-only, Tildes (https://tildes.net https://tildes.net). I've been exploring that over the past few weeks, and am positively impressed. It's young yet and small, but shows promise, a sane and healthy community (sharply contrasting both Voat and Imzy in this regard), and some innovative and positive technical features, as well as an expressly member-driven, donor-supported, model. There's plenty of opportunity to go wrong, but the launch looks good so far. Reddit are certainly providing a golden window of opportunity. https://blog.tildes.net/announcing-tildes https://blog.tildes.net/announcing-tildes

Crespyl 8y ago
Tildes is still kind of finding its feet as a community, and there's a certain degree of navel-gazing as everyone tries to figure out exactly what kind of content and behavior is/isn't desirable. That said, the stated goals and driving philosophy seem sound, and the design of the site functionality seems to be on track to fix some of the core problems with reddit and similar sites. The concepts of nested groups with "bubble-up", content tagging, and multi-dimensional vote/tags on comments (when comment tags are eventually re-enabled) are all really appealing.
- dredmorbius 8y ago
  Morbius's Law of New Media Platforms: The first topic of discussion shall be of the platform itself, what it is, what it isn't, and how its design shapes those roles. Add in healthy quantities of tugging from all sides trying to shape their own pet platform of choice. https://ello.co/dredmorbius/post/H4mXSK6nC35gLUucGdkrqw https://ello.co/dredmorbius/post/H4mXSK6nC35gLUucGdkrqw
SauciestGNU 8y ago
What do you consider to have been problems in relation to the Imzy community? Edit: this looks like a project with phenomenal potential that I would definitely be interested in using.
- 8y ago

noddy1 8y ago

Anyone have any insight into why goog/fb haven't acquired reddit at this point? If they could get it for anything near the 1.8billion previous valuation surely they would just snap it up?

XalvinX 8y ago

What's wrong with $100,000,000? Why does everything have to be about money all the time anyways? And if it does have to be about money, then they should give the content creators and moderators their share, should they not? This is what's called a "slippery slope" ...

XalvinX 8y ago

I bet organizations such as the KKK would love to advertise on reddit, so hey, if they want to turn this into a money thing they should have plenty of monetization opportunities. My popcorn is in the microwave..... ;-)

pacifika 8y ago

Social media + sponsored content = fake news problem. It’s taking the trust and integrity of the platform and selling that in exchange for exposure to unverified content.

thinkingemote 8y ago

The reason marketeers don't like traditional advertising in Reddit is because they are getting their advertising for free by pretending to post as normal users. A room full of students can push any product, message or image. Its rampant in resdit. Why pay more for less reach?