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What the hell does a site like Reddit do with almost half a billion dollars?! That's insane.

by barbazoo 5y ago

hinkley 5y ago
Figure out how to make two thirds of a billion dollars off its users, that’s what.
ryanSrich 5y ago
Launder it.
- ch4s3 5y ago
  So they're taking financing under scrutiny from the SEC, in a round lead by Fidelity. Where's the elicit money that they're trying to turn legitimate?
lomereiter 5y ago
For example, they could provide a hidden (and very expensive) API for hedge funds, so that they could manipulate stock prices more conveniently.
gkoberger 5y ago
It's not easy to run a company with as many users as they have. As a mod, they've put a lot of work recently into flagging trolls and astroturf accounts, and still have a lot of work to do. I run r/sanfrancisco, and wow there's a ton of bots and trolls flooding our sub about the Newsom recall. They also seem to really want to find a way to monetize content in a new way. They've flirted with crypto and awards, but I imagine they have strong ambitions around how they can reward creators and moderators in a healthy, non-ad-based-way. (Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone.) Plus the usual suspects (infrastructure, traditional demand gen marketing, paid moderation, etc).
- setr 5y ago
  >Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone The oddity is that their user's aren't that anonymous -- in fact, they very directly tell reddit what their interests are. Like a trade magazine, reddit really doesn't have to do any analysis at all to figure out how to map ads to the right target audience. It confounds me how they haven't managed to do a much better job of targeted advertising -- just showing woodworking tool ads on the woodworking sub would be a dramatic improvement over the current setup.
  - gkoberger 5y ago
    My quick Google-ing shows that they make about $100M/year on ads. So they do this and it works decently well. However, ads at other social networks have evolved way past this level of targeting (which is a bad thing, in my opinion, but alas). Social networks like Facebook know so much about not just your likes but the people you're friends with and how much your income is and what stores you've been to and what you do on Instagram and what your age is and what state you're in and... the list goes on. I think most subreddits are tough to monetize. What do you sell to r/funny or r/politics or r/sanfrancisco? What does r/choosingbeggars want to buy? There's a few obvious ones (diets, hobbies), but I think eeking out $100M from that is already impressive. Plus, Reddit's audience is way more against ads than Instgram/Facebook/etc.
    - colinmhayes 5y ago
      Reddit knows all the subs you subscribe to though. They don't have to give all users of a sub the same ad, just give everyone ads based off their most valuable interests.
    - PhoenixReborn 5y ago
      They actually made 100M in a single quarter recently, and not a year. Source: https://www.sfexaminer.com/news/reddit-raises-410-million-in-new-funding/ https://www.sfexaminer.com/news/reddit-raises-410-million-in... So let's say their annual revenue is 3-4x since ad spend is usually weighted heavily towards Q4. At 300-400M per year and growing that's actually pretty solid.
michaelt 5y ago
Well you see, they desperately need the runway to give them time to figure out how to pay back half a billion dollars.
- nl 5y ago
  Unless you have specific information otherwise, this doesn't appear to be debt financing, so they never need to pay it back.

What the hell does a site like Reddit do with almost half a billion dollars?! That's insane.

hinkley 5y ago

Figure out how to make two thirds of a billion dollars off its users, that’s what.

ryanSrich 5y ago

Launder it.

ch4s3 5y ago
So they're taking financing under scrutiny from the SEC, in a round lead by Fidelity. Where's the elicit money that they're trying to turn legitimate?

lomereiter 5y ago

For example, they could provide a hidden (and very expensive) API for hedge funds, so that they could manipulate stock prices more conveniently.

gkoberger 5y ago

It's not easy to run a company with as many users as they have. As a mod, they've put a lot of work recently into flagging trolls and astroturf accounts, and still have a lot of work to do. I run r/sanfrancisco, and wow there's a ton of bots and trolls flooding our sub about the Newsom recall. They also seem to really want to find a way to monetize content in a new way. They've flirted with crypto and awards, but I imagine they have strong ambitions around how they can reward creators and moderators in a healthy, non-ad-based-way. (Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone.) Plus the usual suspects (infrastructure, traditional demand gen marketing, paid moderation, etc).

setr 5y ago
>Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone The oddity is that their user's aren't that anonymous -- in fact, they very directly tell reddit what their interests are. Like a trade magazine, reddit really doesn't have to do any analysis at all to figure out how to map ads to the right target audience. It confounds me how they haven't managed to do a much better job of targeted advertising -- just showing woodworking tool ads on the woodworking sub would be a dramatic improvement over the current setup.
- gkoberger 5y ago
  My quick Google-ing shows that they make about $100M/year on ads. So they do this and it works decently well. However, ads at other social networks have evolved way past this level of targeting (which is a bad thing, in my opinion, but alas). Social networks like Facebook know so much about not just your likes but the people you're friends with and how much your income is and what stores you've been to and what you do on Instagram and what your age is and what state you're in and... the list goes on. I think most subreddits are tough to monetize. What do you sell to r/funny or r/politics or r/sanfrancisco? What does r/choosingbeggars want to buy? There's a few obvious ones (diets, hobbies), but I think eeking out $100M from that is already impressive. Plus, Reddit's audience is way more against ads than Instgram/Facebook/etc.
  - colinmhayes 5y ago
    Reddit knows all the subs you subscribe to though. They don't have to give all users of a sub the same ad, just give everyone ads based off their most valuable interests.
  - PhoenixReborn 5y ago
    They actually made 100M in a single quarter recently, and not a year. Source: https://www.sfexaminer.com/news/reddit-raises-410-million-in-new-funding/ https://www.sfexaminer.com/news/reddit-raises-410-million-in... So let's say their annual revenue is 3-4x since ad spend is usually weighted heavily towards Q4. At 300-400M per year and growing that's actually pretty solid.

michaelt 5y ago

Well you see, they desperately need the runway to give them time to figure out how to pay back half a billion dollars.

nl 5y ago
Unless you have specific information otherwise, this doesn't appear to be debt financing, so they never need to pay it back.