Reddit has never turned a profit in nearly 20 years, but filed to go public anyway
cnn.com
Reddit has never turned a profit in nearly 20 years, but filed to go public anyway::Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.
Problem is the entire concept of a site like reddit being "for profit" in the first place.
I know we all wax nostalgic about the old non-centralized Internet with its various small websites and forums, but one thing I do genuinely miss from those days was that those places existed because the people running them wanted them to exist. They had ads or took donations to keep the lights on, but no one was looking to get rich. Passion, not profit.
The decentralized internet was run more by people, the centralized internet is run by board rooms.
That's why I like the idea of the fediverse. That is why this place feels familiar to those early days.
I still remember clicking a bunch of irrelevant ads for knives and other weird shit on a forum I visited regularly because the owner said they get slightly more money when ads get clicked on site.
I'm doing my part!
And in the days before tracking cookies, doing that didn't ruin all the ads you'll ever see again
Ads don’t even bother me inherently. It’s part the maximum obnoxiousness of them these days, of course. But most of all, if I do manage to see an ad (like in a mobile app), I get irrationally annoyed at the fact that it is supposed to be tailored to me and yet here I am looking at a 20 second unskippable ad for something I would never in a million years care for.
There was a simple version of reddit that could be profitable without compromising what made it enjoyable for the users, but the suits had to go chasing after a bunch of fads (remember bow they tries to produce a series of video AMAs?).
The "old internet" hasn't gone away. It's easier than ever for your average person to set up their own website. Look at all the shit you can do with WordPress, usually for free and usually with minimal technical knowledge or experience. Reddit/Facebook/Google/etc have done nothing at all to prevent people from doing that. The people still choose reddit/Facebook/google. I don't know we're supposed to change that without actually removing people's freedom of choice.
In my opinion/experience, it's for a few reasons. People are marketed these centralized platforms, typically they're very/fairly simple to use, and those platforms already have an established userbase. Combined with the other factors, the userbase will keep growing, which also incentivizes Even more users to adopt the platform.
For most people, there's no incentive to use some small random forum. And these small random forums aren't typically run for profit, meaning people aren't paying for ads for their niche forum or hobby website because it's just a hobby, not a business run for profit. Whereas people will see countless ads for Instagram or TikTok. Typically, people who don't block ads, and use these sorts of media didn't care enough to bother looking for alternative platforms, they couldn't even be bothered to set up an adblocker.
I have no qualms with a person making a comfortable living off of building a website like Reddit. None at all. I’d rather have someone who’s able to dedicate their full time and even a team to making an experience great for users and making a very healthy living off of it.
But yea, spez is a greedy fuck and the ELT at Reddit are all greedy fucks. Reddit has no business being a publicly traded company.
honestly, it has the word AI somewhere in their last year activities, even if they don't do it themselves.
Investors are dumb as fuck, they know nothing about anything other than keywords and hype trains, so with the AI keyword they might go crazy on this.
I keep saying it, the stock market is a mistake for humanity, it doesn't make sense to put a gambling house in the core of the world economy.
But it isn't gambling ... It's managed and calculated financing in companies that need the investment in order to grow
I'm kidding, this is sarcasm .. the stock market is a freakin casino with built in cheats and frauds that favor the rich and wealthy.
The stock market, much like capitalism in general, is useful if regulated properly, but the inherent corrosive nature of human greed on any regulatory system will eventually erode those regulations down and let this shit run rampant. There are genuine benefits to it, but they're buried beneath the sheer scale of wealth begetting more wealth at the expense of everyone else.
Part of it is that, to spite it being "gambling", it sure doesn't feel like there's a lot of losing going on with the biggest players. They don't seem to need to be as careful as you or I would need to be. It'd be one thing if it was fair gambling, but it isn't.
Every decision made since before the first world war has been a mistake for humanity, from the way we deliver electricity to the way we run the economy to the way we run our education system. Just one big ball of mistakes coming right at ya, all with better alternatives available at the outset, all prejudicially rejected because you can't make dragon-hoard piles of money those ways.
Pretty soon we'll all die though, so there's that.
wise words
Perhaps if the ceo wasn't making like 200m a year, it would show some profits
Not to be that guy, but I think he makes 300k and was given 193m in stock options last year based on some whack evaluation.
Still an utterly insane number, hope they get crushed on the public market
He paid himself 193 mil because he knows its not going to be worth more than 1.93 mil after the IPO.
I've spent years watching IPOs, it's going to get pumped and then dump after a few months. Anyone shorting it after the first couple of weeks is going to lose their ass.
I can't wait to see how this plays out
Hollywood accounting tactics probably aswell
but they've cleaned the site up so much! I mean they got rid of all of us, didn't they
Next is that pesky porn problem that makes up most of the traffic.
Why, Google just paid $60 million a year to scan reddit accounts and generate new dirty videos along with designing adult actors suited to user personal tastes. (What else can you do with reddit user data?)
I think people don’t understand just how good Facebook is at ads. Their relevance engine is unlike anything else. If something 1/3 as effective could be done to Reddit, this place would be making billions.
I’ve run ads on Facebook and I’ve run ads on Reddit. Facebook was like a massage with a happy ending, and Resdit was like being shat on by a vagrant.
There’s absolutely no reason Reddit couldn’t be making tons of money with as much as they know about hobbies and interests in general, and the free traffic they are able to draw to such a mountain of niche content.
I hope not to see Reddit go the way of Facebook. But to say it couldn’t make a profit is not true.
I feel like the average Reddit user is more likely to be running Adblock than the average Facebook user.
People talk about Reddit and AI in terms of what Reddit will do for those LLMs. But I imagine another part of it has to be what they’ll do for Reddit. Like redditors volunteer sooo much information that it’s really an advertises dream if you can start to thread it together.
Reddit knows who you really are, but facebook knows who you want to look like you are.
I’d think you’re much more likely to click ads based on the latter.
Given Spez's salary I'd say they definitely make a buck.
He's going to take it all.
Fucking arseholes. It has been my imaginary home since it started and now I have to use fucking mastodon and bluesky fucking dicks.
On the plus side, Lemmy has been getting really good recently
I hope their IPO comes crashing down in flames.
Didn't think I'd be here hoping for the failure of what used to be my favorite website but here we are.
Most tech companies aren't profitable when they go public, that's been true as long as the tech industry existed.
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I suspect it's because they're worried that their users are going to short them and encourage others to do the same, so they're trying to get them involved and committed. They don't want WSB causing shit. My guess is that the share prices will do pretty well, at least initially. There are plenty of ignorant investors who want to get in on the next big tech stock. Just a guess though, I don't know enough about this stuff to invest in stocks myself.
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I smell a short position in my future after that IPO...
Imagine the absolute conflict of interest that is r/WSB
Ahh…Tech industry, never change
Hoe does this work. If a company has not made a profit in 20 years. How is it not bankrupt?
You keep telling the next investor it'll be profitable soon. I believe the guy that came up with this scheme first went to prison or something, but afterwards we all collectively decided we were cool with it.
That's why they need to go public in the first place. Investors are like it's right now or you're shutting down, no more free money for you.
They've had investors who were willing to pay into a loss-making company. Could be that they sold investors on the idea that it will be profitable at some point in the future but it needs to be funded while it grows. Could also be that the value they see in it is not just financial - the ability to influence opinion, harvest data, stuff like that.
Does it have shell companies that Reddit offloads its profit to...
Might be similar to twitter or news media, influence is worth more to its owners?
Data is valuable as well...
Top 10% own stock, so that can also be part of the stock games...
Reddit has been a private company for its entire existence. There really isn't a point in it making a profit, as long as the people running it are paying themselves.
Unlikely. It's in all likelihood just a bad business, like so many other VC-subsidised businesses that have come before them. Case in point: Uber, Airbnb, WeWork.
The whole game is to offer services at a loss for enough time to lock in customers, then raise the prices in the future.
This is the best summary I could come up with:
Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.
The filing comes nearly three years after Reddit hired its first chief financial officer, and executives, including co-founder and CEO Steve Huffman, began publicly discussing the possibility of an IPO to further elevate the company’s profile.
Reddit, which has called itself the “front page of the internet,” is a social media veteran: the company started in 2005, the year that college roommates Huffman and Ohanian graduated from the University of Virginia.
In 2021, Reddit caused mass market upheaval when a community of day traders on the platform called WallStreetBets began buying up shares of GameStop in an effort to hurt hedge funds that bet against the stock.
Thursday’s filing offers the most detailed look yet at the state of Reddit’s business, which seeks to grow beyond the traditional ad-supported model upon which most social platforms continue to heavily rely.
And while Reddit said it expects its total addressable market in advertising to grow to $1.4 trillion by 2027, it also acknowledged in the filing’s risk factors disclosure that it has “a history of net losses and we may not be able to achieve or maintain profitability in the future.”
The original article contains 933 words, the summary contains 215 words. Saved 77%. I'm a bot and I'm open source!
... they wrote in their online publication nobody not online could read.
That's not what they mean by "chronically online"
What do you mean by "by"? 🤡
Your non sequitur is real dumb. Reading a single article online is not the same as Redditor Internet usage habits.
I bet you're a blast at parties.
How are you parsing that quote? What do you think it means?