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Can someone shed light on how Pinterest and Instagram can be worth billions? But Reddit is only worth 400m?

by kb120 14y ago

dangrossman 14y ago
Pinterest is millions of people freely marketing consumer products to each other. The potential for both referral commissions and data mining is huge. Reddit is a fancy meme and porn sharing forum (the main subreddits dwarf all the 'intellectual' ones combined), which few advertisers are interested in, and which has been unable to produce enough revenue to maintain more than a skeleton staff with self-serve ads and premium accounts.
andrewhillman 14y ago
This is a complicated question with many angles. First, Reddit is now apart of bigger company. Obviously, this changes anything to do with valuation. Do investors want a "piece" of a company that is within a bigger company? Maybe, but if they do the valuation is going to be a lot lower compared to if Reddit was independent. The other issue is that Reddit makes money therefore the valuation is based on earnings. Their earnings might be low for the amount of traffic they get. Sometimes it's better to not generate any money because the valuation would be based solely user growth+engagement. With this being said, if Reddit was an independent company then they too would have a crazy valuation. I am sure the founders think they sold way too early but at the time, it was the best option. Kudos to the buyer who didn't let it enter the M&A dead pool.
- robryan 14y ago
  If they were an independent company and didn't have any revenue history to go by I think they would be worth more. Part of the Pinterest valuation would be speculating on how much they could generate through various forms of advertising.
fizx 14y ago
A reddit with its present amount of users and no 4chan influence would be worth a billion. Masturbation jokes on the front page scare away advertisers.
blhack 14y ago
Reddit still, strangely, quizzically, confusingly, maddeningly does not monetize on outbound links. Here: http://www.reddit.com/r/shutupandtakemymoney http://www.reddit.com/r/shutupandtakemymoney Or Here: http://www.reddit.com/r/buyitforlife http://www.reddit.com/r/buyitforlife Every single link to amazon etc. via reddit should be earning them money via viglink or their own program.
hzay 14y ago
If you accept that facebook was worth $100 billion, and if you accept that instagram was a credible threat to facebook, then it follows that instagram was perhaps worth 1% of facebook. Reddit is not facebook's or google's threat so its valuation is not based on a big company's valuation.

Can someone shed light on how Pinterest and Instagram can be worth billions? But Reddit is only worth 400m?

by kb120 14y ago

Can someone shed light on how Pinterest and Instagram can be worth billions? But Reddit is only worth 400m?

Pinterest is millions of people freely marketing consumer products to each other. The potential for both referral commissions and data mining is huge. Reddit is a fancy meme and porn sharing forum (the main subreddits dwarf all the 'intellectual' ones combined), which few advertisers are interested in, and which has been unable to produce enough revenue to maintain more than a skeleton staff with self-serve ads and premium accounts.

andrewhillman 14y ago

This is a complicated question with many angles. First, Reddit is now apart of bigger company. Obviously, this changes anything to do with valuation. Do investors want a "piece" of a company that is within a bigger company? Maybe, but if they do the valuation is going to be a lot lower compared to if Reddit was independent. The other issue is that Reddit makes money therefore the valuation is based on earnings. Their earnings might be low for the amount of traffic they get. Sometimes it's better to not generate any money because the valuation would be based solely user growth+engagement. With this being said, if Reddit was an independent company then they too would have a crazy valuation. I am sure the founders think they sold way too early but at the time, it was the best option. Kudos to the buyer who didn't let it enter the M&A dead pool.

robryan 14y ago
If they were an independent company and didn't have any revenue history to go by I think they would be worth more. Part of the Pinterest valuation would be speculating on how much they could generate through various forms of advertising.

fizx 14y ago

A reddit with its present amount of users and no 4chan influence would be worth a billion. Masturbation jokes on the front page scare away advertisers.

blhack 14y ago

Reddit still, strangely, quizzically, confusingly, maddeningly does not monetize on outbound links. Here: http://www.reddit.com/r/shutupandtakemymoney http://www.reddit.com/r/shutupandtakemymoney Or Here: http://www.reddit.com/r/buyitforlife http://www.reddit.com/r/buyitforlife Every single link to amazon etc. via reddit should be earning them money via viglink or their own program.

hzay 14y ago

If you accept that facebook was worth $100 billion, and if you accept that instagram was a credible threat to facebook, then it follows that instagram was perhaps worth 1% of facebook. Reddit is not facebook's or google's threat so its valuation is not based on a big company's valuation.