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Brian Lunduke back in 2019 when Reddit took $150 million from Tencent basically said that Reddit would be a company in trouble with in 5 years. His argument was

Brian Lunduke back in 2019 when Reddit took $150 million from Tencent basically said that Reddit would be a company in trouble with in 5 years. His argument was that it shouldn't cost that much to run the place and as such they would have to start pleasing investors and not users. The argument was that you can buy an obscene amount of storage and bandwidth for only a fraction of the money they were raising. It is even more true today. Look at the amount of storage and bandwidth archive.org uses and how little money they bring in. This is not a money issue in terms of running the site.

javier2 3y ago
Yeah, they would probably do very well with news agency revenues, but the investors want Google/Facebook revenues.
larksimian 3y ago
If they charged like $2/year/user for 3d party API access they'd be profitable and no one would be that outraged. Their expenses are still absurd given that, from my perspective they've literally done no improvement to the product in the last 5 years or more. Just maintain the API, have some staff to run the servers, pay a few admins to support the mods and feature freeze Reddit the site as much as possible. It's way crazier that Reddit has 2k employees than that Twitter had 4k or whatever. Edited from $2/month/user to $2/year/user.
- itronitron 3y ago
  >> If they charged like $2/month/user for 3d party API access they'd be profitable But then the leadership would only be wealthy and not famous. It feels like the focus on ad sales by so many platforms is due to their executives' personal preference in having broad ranging social influence (by playing gateway to the masses) instead of a predictable revenue stream.
  - DirkH 3y ago
    This is interesting, but can you further explain how yoy get broad ranging social influence from focusing on ads? I don't quite get that.
    - rightbyte 3y ago
      I don't think it is the ads but the algorithmic feed that they manipulate for political ends, rather than making money. TikTok got big by making an algorithmic feed that did not push BS to its users I think.
    - itronitron 3y ago
      Several social media platforms, notably Facebook and Twitter, have (or had) marketing campaign teams that help their clients focus their marketing campaigns on particular segments of interest. The belief that they could further wield influence may drive them to be less concerned about near term profitability.
- rchaud 3y ago
  It's not about actual profitability, it's about what you can convince an investor is the potential future profitability. Merely by recording an actual profit, you have shown your hand to the investor, who can now estimate what your ceiling is. And it's never going to be as much as what it was when profits were merely hypothetical.
- NovaDudely 3y ago
  Exactly! If they announced that you will have to pay even $5 a month for 3rd party access - I think most people would be on board. They just choose the dumbest of all paths.
gary_0 3y ago
Reddit was clearly selling itself to VCs as the next Facebook while not bothering to understand the culture of the content, moderators, and audience on their site. From what headlines I've seen about Reddit's acquisitions and marketing spend I get the impression they were a money furnace that deluded themselves into thinking they were innovating. Now that the money printer is out of paper, investors are banging on the door, and the people on the other side of that door are panicking. It turns out a bunch of nerds and aficionados piping text through your servers does not equate to a hundred-billion-dollar business, and trying to force the issue will only make things worse.

javier2 3y ago

Yeah, they would probably do very well with news agency revenues, but the investors want Google/Facebook revenues.

larksimian 3y ago

If they charged like $2/year/user for 3d party API access they'd be profitable and no one would be that outraged. Their expenses are still absurd given that, from my perspective they've literally done no improvement to the product in the last 5 years or more. Just maintain the API, have some staff to run the servers, pay a few admins to support the mods and feature freeze Reddit the site as much as possible. It's way crazier that Reddit has 2k employees than that Twitter had 4k or whatever. Edited from $2/month/user to $2/year/user.

itronitron 3y ago
>> If they charged like $2/month/user for 3d party API access they'd be profitable But then the leadership would only be wealthy and not famous. It feels like the focus on ad sales by so many platforms is due to their executives' personal preference in having broad ranging social influence (by playing gateway to the masses) instead of a predictable revenue stream.
- DirkH 3y ago
  This is interesting, but can you further explain how yoy get broad ranging social influence from focusing on ads? I don't quite get that.
  - rightbyte 3y ago
    I don't think it is the ads but the algorithmic feed that they manipulate for political ends, rather than making money. TikTok got big by making an algorithmic feed that did not push BS to its users I think.
  - itronitron 3y ago
    Several social media platforms, notably Facebook and Twitter, have (or had) marketing campaign teams that help their clients focus their marketing campaigns on particular segments of interest. The belief that they could further wield influence may drive them to be less concerned about near term profitability.
rchaud 3y ago
It's not about actual profitability, it's about what you can convince an investor is the potential future profitability. Merely by recording an actual profit, you have shown your hand to the investor, who can now estimate what your ceiling is. And it's never going to be as much as what it was when profits were merely hypothetical.
NovaDudely 3y ago
Exactly! If they announced that you will have to pay even $5 a month for 3rd party access - I think most people would be on board. They just choose the dumbest of all paths.

gary_0 3y ago

Reddit was clearly selling itself to VCs as the next Facebook while not bothering to understand the culture of the content, moderators, and audience on their site. From what headlines I've seen about Reddit's acquisitions and marketing spend I get the impression they were a money furnace that deluded themselves into thinking they were innovating. Now that the money printer is out of paper, investors are banging on the door, and the people on the other side of that door are panicking. It turns out a bunch of nerds and aficionados piping text through your servers does not equate to a hundred-billion-dollar business, and trying to force the issue will only make things worse.