5 ms·

So a not yet profitable site is going to start giving away revenue. Very happy I'm not an investor in that company.

lukasm 13y ago
Let me rephrase that "So a not yet profitable site is going to spend 10% of a new form of marketing. Very not happy I'm not an investor in that company" :)
- chrisblackwell 13y ago
  You make some good points, and I wish to subscribe to your newsletter.
- incision 13y ago
  >"... spend 10% of a new form of marketing..." Exactly. Seems a big part of the Reddit appeal is the love for feeling a part of the collective. All at once this reinforces that sense, lends a suggestion of passive nobility to using the site and pre-emptively defends an increase in advertising. I expect they'll also see some jump in guilt tripping by the community around adblocking as well.
  - rhizome 13y ago
    That's a heck of a strawman.
  - lelandbatey 13y ago
    There are already ads on reddit that say "Thanks for not using adblock." Though they may get more blatant as time passes.
    - incision 13y ago
      I'm thinking more among the community than from Reddit directly. You already see a fair bit of that kind of peer pressure in some circles [0][1]. 0: http://www.reddit.com/r/CoDCompetitive/comments/1ssvjm/if_you_really_support_esports_subscribe_or_dont/ http://www.reddit.com/r/CoDCompetitive/comments/1ssvjm/if_yo... 1: http://www.reddit.com/r/nerdcubed/comments/1w2h95/adblock_discussion/ http://www.reddit.com/r/nerdcubed/comments/1w2h95/adblock_di...
    - MarkTee 13y ago
      Making them any more blatant isn't going to do much good, seeing as those who block ads won't be able to see them.
  - ksk 13y ago
    I'm certain the non-profits who receive the money don't care about what it "seems" to anyone.
- jamestanderson 13y ago
  >Very not happy I'm not an investor in that company So you want to be an investor now?
slariviere 13y ago
It's only for the ad revenue. I'm guessing this is a small part of their revenue compared to reddit gold.
- Shivetya 13y ago
  Is reddit gold all that much? I could imagine a surge when it came out, but how about ongoing?
  - deleted 13y ago
    [deleted]
  - mahranch 13y ago
    http://www.reddit.com/gilded http://www.reddit.com/gilded You can see "gilded" comments in real time. Gilded is when one user gives a month of reddit gold to another user (it doesn't include people buying it for themselves). I'd say it's most definitely a success.
  - nandhp 13y ago
    They have a "gold goal" progress meter at the bottom of the homepage sidebar. I assume this is approximately "amount of gold purchases needed to keep us from losing money today" -- it's usually above 80%; yesterday it was 107%.
  - njr123 13y ago
    About $50k a month. http://gold.reddit-stream.com http://gold.reddit-stream.com
    - theknown99 13y ago
      So about 2% of their hosting bill...
    - rhc2104 13y ago
      That page says, "These numbers only include gifted gold"
seiji 13y ago
Reminder: "profit" is left over money. Profit means you've paid all your expenses (including people's salaries), and you still have money left over. You can be not-profitable forever and still have a working company. In fact, some organizations are even specifically set up to be "not profitable."
- chrisblackwell 13y ago
  Not-for profit companies have profit, they just redistribute the profits at the end. Any company that never has profit is doomed to fail.
  - RussianCow 13y ago
    By definition, not-for-profit companies don't make a profit. If your company's expenses are always as high as its revenues, then the company can survive forever. So I don't see what your point is.
    - bradleyjg 13y ago
      A lot of them pay supra-market salaries to certain employees with ties to the handpicked, perpetual, unaccountable board. Although nominally non-profits such corporations are fairly indistinguishable from partnerships.
    - gojomo 13y ago
      At least in the US, non-profits may make a profit, it's just that they can't have owners who receive the profits (or managers/insiders who receive undue compensation). Any profits must remain within the organization and dedicated to its mission. (Although "non-profit" is the common name, in this sense it's better to think of it as shorthand for "not for profit", meaning that achieving financial profits for its owners/insiders is not its legal purpose.) See also: https://www.nolo.com/legal-encyclopedia/taxes-nonprofit-corporation-earnings-30284.html https://www.nolo.com/legal-encyclopedia/taxes-nonprofit-corp...
      - 13y ago
humanrebar 13y ago
In theory, if they can get enough people to stop blocking reddit ads, it might actually increase ad revenues. I guess we'll see if that actually works.
- pan69 13y ago
  Sounds like a rock solid business plan. If they could only persuade people...
- HannibalLecter 13y ago
  Whenever a business isn't sure if something will work, you know that model is doomed.
- theknown99 13y ago
  IMHO, the type of person who installs adblock isn't the type of person you can sell things to easily. They're decidedly anti-mainstream, anti-corporate, probably not particularly rich, etc. So it's not just a matter of convincing their userbase to stop blocking ads, you'd need to tell their current userbase to go away, and invite a better userbase to come and click on ads. Reddit created this problem by fostering a culture of anti advertising early on. Reddit should probably just become some non-profit foundation like wikipedia and show begging adverts.
  - nwh 13y ago
    > IMHO, the type of person who installs adblock isn't the type of person you can sell things to easily. They're decidedly anti-mainstream, anti-corporate, probably not particularly rich, etc. [citation needed] Could just be that the people installing AdBlock don't like being distracted by multitudes of flashing popover and automatically playing videos. I doubt it's anything to do with being anti-mainstream or anti-corporate.
  - coderdude 13y ago
    They should focus their efforts on redditgifts (http://redditgifts.com/ http://redditgifts.com/) and consider putting it on the main site instead of on a separate domain. Their users may not like to buy mainstream products but they definitely like to buy quirky, off-the-wall things as evidenced by `Shut Up And Take My Money`'s success with advertising on Reddit. They've already got the right idea with the marketplace model. They should (if they're not already) focus on trying to attract unique products through a program similar to Steam's Greenlight and stop focusing so much on advertising. Advertising and Redditors -- generally speaking -- are not a good match.
theknown99 13y ago
If Reddit ever became profitable, I think their userbase would revolt. The average Redditor is pretty anti-corporate, anti-rich, anti-profit, etc etc. It's more in line with wikipedia.
- seunosewa 13y ago
  That's apparently what reddit thinks, but they are wrong.
logicallee 13y ago
Obviously, if it were profitable then revenues would have to be substantial - above total operating costs. Any percentage of that would be a massive expenditure. Whereas if it is not yet profitable, then revenue could be tiny - i.e. you might be 'vetoing' (with your comment) a $50 expenditure that serves to generate huge amounts of free advertising and goodwill for Reddit. Frankly with this level of analysis, it would surprise me greatly to learn that you have any money remaining to invest.
commander_ahab 13y ago
Probably not ideal given it's financial situation, but the userbase may respond positively, and that could have a proportionate benefit that outweighs the negative.
cJ0th 13y ago
They might be onto something. I guess many users consider Reddit a trustworthy and ethical company. Such a move only strengthens this image. This in turn makes their users very faithful (as long as they manage to live up their image) If they manage to (directly or indirectly) sell a no-bullshit product/service that appeals to their users then they are going to be a very successful company. (What's more, trust is a "resource" potential competitors can not easily imitate) Sure, they haven't really found anything yet but building up trust will capitalize if the right product/service is found. If there really exists is no such product then our whole society would have quite some serious flaws ...

Let me rephrase that "So a not yet profitable site is going to spend 10% of a new form of marketing. Very not happy I'm not an investor in that company" :)

chrisblackwell 13y ago
You make some good points, and I wish to subscribe to your newsletter.
incision 13y ago
>"... spend 10% of a new form of marketing..." Exactly. Seems a big part of the Reddit appeal is the love for feeling a part of the collective. All at once this reinforces that sense, lends a suggestion of passive nobility to using the site and pre-emptively defends an increase in advertising. I expect they'll also see some jump in guilt tripping by the community around adblocking as well.
- rhizome 13y ago
  That's a heck of a strawman.
- lelandbatey 13y ago
  There are already ads on reddit that say "Thanks for not using adblock." Though they may get more blatant as time passes.
  - incision 13y ago
    I'm thinking more among the community than from Reddit directly. You already see a fair bit of that kind of peer pressure in some circles [0][1]. 0: http://www.reddit.com/r/CoDCompetitive/comments/1ssvjm/if_you_really_support_esports_subscribe_or_dont/ http://www.reddit.com/r/CoDCompetitive/comments/1ssvjm/if_yo... 1: http://www.reddit.com/r/nerdcubed/comments/1w2h95/adblock_discussion/ http://www.reddit.com/r/nerdcubed/comments/1w2h95/adblock_di...
  - MarkTee 13y ago
    Making them any more blatant isn't going to do much good, seeing as those who block ads won't be able to see them.
- ksk 13y ago
  I'm certain the non-profits who receive the money don't care about what it "seems" to anyone.
jamestanderson 13y ago
>Very not happy I'm not an investor in that company So you want to be an investor now?

slariviere 13y ago

It's only for the ad revenue. I'm guessing this is a small part of their revenue compared to reddit gold.

Shivetya 13y ago
Is reddit gold all that much? I could imagine a surge when it came out, but how about ongoing?
- deleted 13y ago
  [deleted]
- mahranch 13y ago
  http://www.reddit.com/gilded http://www.reddit.com/gilded You can see "gilded" comments in real time. Gilded is when one user gives a month of reddit gold to another user (it doesn't include people buying it for themselves). I'd say it's most definitely a success.
- nandhp 13y ago
  They have a "gold goal" progress meter at the bottom of the homepage sidebar. I assume this is approximately "amount of gold purchases needed to keep us from losing money today" -- it's usually above 80%; yesterday it was 107%.
- njr123 13y ago
  About $50k a month. http://gold.reddit-stream.com http://gold.reddit-stream.com
  - theknown99 13y ago
    So about 2% of their hosting bill...
  - rhc2104 13y ago
    That page says, "These numbers only include gifted gold"

seiji 13y ago

Reminder: "profit" is left over money. Profit means you've paid all your expenses (including people's salaries), and you still have money left over. You can be not-profitable forever and still have a working company. In fact, some organizations are even specifically set up to be "not profitable."

chrisblackwell 13y ago
Not-for profit companies have profit, they just redistribute the profits at the end. Any company that never has profit is doomed to fail.
- RussianCow 13y ago
  By definition, not-for-profit companies don't make a profit. If your company's expenses are always as high as its revenues, then the company can survive forever. So I don't see what your point is.
  - bradleyjg 13y ago
    A lot of them pay supra-market salaries to certain employees with ties to the handpicked, perpetual, unaccountable board. Although nominally non-profits such corporations are fairly indistinguishable from partnerships.
  - gojomo 13y ago
    At least in the US, non-profits may make a profit, it's just that they can't have owners who receive the profits (or managers/insiders who receive undue compensation). Any profits must remain within the organization and dedicated to its mission. (Although "non-profit" is the common name, in this sense it's better to think of it as shorthand for "not for profit", meaning that achieving financial profits for its owners/insiders is not its legal purpose.) See also: https://www.nolo.com/legal-encyclopedia/taxes-nonprofit-corporation-earnings-30284.html https://www.nolo.com/legal-encyclopedia/taxes-nonprofit-corp...
    - 13y ago

humanrebar 13y ago

In theory, if they can get enough people to stop blocking reddit ads, it might actually increase ad revenues. I guess we'll see if that actually works.

pan69 13y ago
Sounds like a rock solid business plan. If they could only persuade people...
HannibalLecter 13y ago
Whenever a business isn't sure if something will work, you know that model is doomed.
theknown99 13y ago
IMHO, the type of person who installs adblock isn't the type of person you can sell things to easily. They're decidedly anti-mainstream, anti-corporate, probably not particularly rich, etc. So it's not just a matter of convincing their userbase to stop blocking ads, you'd need to tell their current userbase to go away, and invite a better userbase to come and click on ads. Reddit created this problem by fostering a culture of anti advertising early on. Reddit should probably just become some non-profit foundation like wikipedia and show begging adverts.
- nwh 13y ago
  > IMHO, the type of person who installs adblock isn't the type of person you can sell things to easily. They're decidedly anti-mainstream, anti-corporate, probably not particularly rich, etc. [citation needed] Could just be that the people installing AdBlock don't like being distracted by multitudes of flashing popover and automatically playing videos. I doubt it's anything to do with being anti-mainstream or anti-corporate.
- coderdude 13y ago
  They should focus their efforts on redditgifts (http://redditgifts.com/ http://redditgifts.com/) and consider putting it on the main site instead of on a separate domain. Their users may not like to buy mainstream products but they definitely like to buy quirky, off-the-wall things as evidenced by `Shut Up And Take My Money`'s success with advertising on Reddit. They've already got the right idea with the marketplace model. They should (if they're not already) focus on trying to attract unique products through a program similar to Steam's Greenlight and stop focusing so much on advertising. Advertising and Redditors -- generally speaking -- are not a good match.

theknown99 13y ago

If Reddit ever became profitable, I think their userbase would revolt. The average Redditor is pretty anti-corporate, anti-rich, anti-profit, etc etc. It's more in line with wikipedia.

seunosewa 13y ago
That's apparently what reddit thinks, but they are wrong.

logicallee 13y ago

Obviously, if it were profitable then revenues would have to be substantial - above total operating costs. Any percentage of that would be a massive expenditure. Whereas if it is not yet profitable, then revenue could be tiny - i.e. you might be 'vetoing' (with your comment) a $50 expenditure that serves to generate huge amounts of free advertising and goodwill for Reddit. Frankly with this level of analysis, it would surprise me greatly to learn that you have any money remaining to invest.

commander_ahab 13y ago

Probably not ideal given it's financial situation, but the userbase may respond positively, and that could have a proportionate benefit that outweighs the negative.

cJ0th 13y ago

They might be onto something. I guess many users consider Reddit a trustworthy and ethical company. Such a move only strengthens this image. This in turn makes their users very faithful (as long as they manage to live up their image) If they manage to (directly or indirectly) sell a no-bullshit product/service that appeals to their users then they are going to be a very successful company. (What's more, trust is a "resource" potential competitors can not easily imitate) Sure, they haven't really found anything yet but building up trust will capitalize if the right product/service is found. If there really exists is no such product then our whole society would have quite some serious flaws ...