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Well simple logic would say that if they get $.12 per user/month, the costs to serve each user (in terms of compute) is probably below $.12 or else they would b

Well simple logic would say that if they get $.12 per user/month, the costs to serve each user (in terms of compute) is probably below $.12 or else they would be losing money, no?

alickz 3y ago
i thought they _were_ losing money?
- appletrotter 3y ago
  Reddit likely could’ve taken profit in recent years, but was instead focused on growth. Reddit doubled its headcount in 2021. There’s no reason to think that compute is a constraining cost for reddit imo. They produce what is at this point legacy tech.
riku_iki 3y ago
$.12 is MAU, which visit sites few times a week. Apollo devs claim his users make 250 reqs/d, which is very different users and there is likely huge gap in costs numbers between cohorts.
- appletrotter 3y ago
  MAU as a figure cannot be a dollar amount, but instead only an integer no? Silly. Maybe you’re thinking of ARPU? Even if the ARPU was an order of magnitude higher, it would still be half as much as Reddit is charging per user to 3PAs. It’s not about compute cost, because compute cost is almost definitely below revenue and the fees being charged don’t seem to have any direct link to it anyway. Compute cost per user must generally be below ARPU, right? So even if a 3PA user cost 5x in terms of compute, at most that would be $.75 if they’re making no profit. Significantly less than the $2.50 3PAs are being charged per user per month. tldr: reddit is charging significantly more for API access than is reasonable to expect it costs them even in lost revenue, let alone raw compute
  - riku_iki 3y ago
    > So even if a 3PA user cost 5x in terms of compute in case of apollo my belief is that it will be much more than 5x it is also not just about pure compute, but also paying salaries.
    - appletrotter 3y ago
      > more than 5x doubt. the backend was open sourced to dispel this rumor. > salaries Salaries are a fixed cost, so not super relevant to API costs given what we already know. ARPU is ARPU. The amortized cost of a user to reddit is below or around ARPU (including R&D), unless they’re making the decision to still leave profit on the table in exchange for growth. However, given recent moves I doubt that.
      - riku_iki 3y ago
        > doubt. the backend was open sourced to dispel this rumor. how its even relevant? Now that backend with unproven track record and unknown quality needs to handle petabytes of reddit data under significant load and with low latency. you can just do the math I proposed to do above: mau visits site few times a month, apollo users generate 250 reqs every day, how we can come to just 5x difference here? > Salaries are a fixed cost its fixed but significant and adds to final number.
        appletrotter 3y ago
        > mau visits site few times a month To you, does MAU stand for monthly active user (singular noun?) > 250 reqs every day Do you know the difference between a request to the API and a site visit?
        riku_iki 3y ago
        > To you, does MAU stand for monthly active user (singular noun?) correct. > Do you know the difference between a request to the API and a site visit? sure, you can incorporate your view on difference into you calculations of how you could arrive to 5x estimation.

Well simple logic would say that if they get $.12 per user/month, the costs to serve each user (in terms of compute) is probably below $.12 or else they would be losing money, no?

alickz 3y ago

i thought they _were_ losing money?

appletrotter 3y ago
Reddit likely could’ve taken profit in recent years, but was instead focused on growth. Reddit doubled its headcount in 2021. There’s no reason to think that compute is a constraining cost for reddit imo. They produce what is at this point legacy tech.

riku_iki 3y ago

$.12 is MAU, which visit sites few times a week. Apollo devs claim his users make 250 reqs/d, which is very different users and there is likely huge gap in costs numbers between cohorts.

appletrotter 3y ago
MAU as a figure cannot be a dollar amount, but instead only an integer no? Silly. Maybe you’re thinking of ARPU? Even if the ARPU was an order of magnitude higher, it would still be half as much as Reddit is charging per user to 3PAs. It’s not about compute cost, because compute cost is almost definitely below revenue and the fees being charged don’t seem to have any direct link to it anyway. Compute cost per user must generally be below ARPU, right? So even if a 3PA user cost 5x in terms of compute, at most that would be $.75 if they’re making no profit. Significantly less than the $2.50 3PAs are being charged per user per month. tldr: reddit is charging significantly more for API access than is reasonable to expect it costs them even in lost revenue, let alone raw compute
- riku_iki 3y ago
  > So even if a 3PA user cost 5x in terms of compute in case of apollo my belief is that it will be much more than 5x it is also not just about pure compute, but also paying salaries.
  - appletrotter 3y ago
    > more than 5x doubt. the backend was open sourced to dispel this rumor. > salaries Salaries are a fixed cost, so not super relevant to API costs given what we already know. ARPU is ARPU. The amortized cost of a user to reddit is below or around ARPU (including R&D), unless they’re making the decision to still leave profit on the table in exchange for growth. However, given recent moves I doubt that.
    - riku_iki 3y ago
      > doubt. the backend was open sourced to dispel this rumor. how its even relevant? Now that backend with unproven track record and unknown quality needs to handle petabytes of reddit data under significant load and with low latency. you can just do the math I proposed to do above: mau visits site few times a month, apollo users generate 250 reqs every day, how we can come to just 5x difference here? > Salaries are a fixed cost its fixed but significant and adds to final number.
      - appletrotter 3y ago
        > mau visits site few times a month To you, does MAU stand for monthly active user (singular noun?) > 250 reqs every day Do you know the difference between a request to the API and a site visit?
        riku_iki 3y ago
        > To you, does MAU stand for monthly active user (singular noun?) correct. > Do you know the difference between a request to the API and a site visit? sure, you can incorporate your view on difference into you calculations of how you could arrive to 5x estimation.