Huffman, if nothing else, you have brought entertainment to my life recently with this debacle. Between Reddit and RHEL lately it’s just amazing how fast companies like to burn through good will. I used to use Reddit daily and now I refuse. If I was an advertiser I would be in full sprint (I believe many have left already).
Advertisers just aren't running away from Reddit. They were never there in the first place. Reddit's revenue is tiny considering it's userbase. And their data is categorized well, by default, for free by a volunteer force of moderators. And still they're not making money. How is that even possible?
I paid for Reddit Premium for an ad-free experience. Reddit makes no ad revenue from me. All these moves won't change that for Reddit.
Spez's claim that "the app" is "generating" API calls is nonsense. It's users like you and me that generate API calls using an https client that, in this case, speaks API. Reddit Premium users are their highest ARPU class, over 10x what they claim they can get from advertisers.
It therefore seems obvious to partner with premium app devs, to allow the apps to support Reddit Premium users as a perk of Reddit Premium. Subscribing to both Reddit Premium (paying for ad free access) and app (supporting the app developer) is not a problem for these users.
The Venn Diagram for these two premium spends is clear -- and Reddit is attacking it to no possible gain. There is no alternative business model on the table better for them (and their IPO price) than a premium user remaining a premium user.
By killing my ability to pay for Apollo, they will not gain a single ad view from me, because I pay to not see the ads already.
Further, they will now also lose 10 users worth of ad views, because I will no longer pay for Reddit Premium.
Instead, let Premium accounts access through API, Reddit's Premium user count will balloon, and quality apps will gain a new audience of ready-to-spend subscribers, all with no impact on Reddit's ability to sell ads which make strictly less money than Premium accounts.
(I am confused why this obvious solve is never discussed. News reporting is accepting the premise apps issue API calls instead of users, Spez's AMA is terrible, and community threads are missing this. Apollo dev also fails to help the press understand the framing that Apollo is a user agent and "the web" was intended for use by user-agents. None of this is coming up.)
While it is confusing why Reddit wouldn't offer it as an olive branch, I don't think allowing Reddit Premium subscribers to access the API for free would be an ideal solution. It would be extremely confusing for the majority of users if they had to both 1) subscribe to Reddit Premium in order to use 3rd party apps at all, and then 2) also pay (likely via a second subscription) to use each specific 3rd party app. Both Reddit and the app developers would probably have to spend a significant amount of user support effort to explain why users need to pay twice (or more if they want to use more than one app) to access Reddit.
Imagine it from the perspective of a user who is new to Reddit and downloads one of those apps off the app store (possibly paying money to do so). After they fire it up they'll discover that they can't even use it until they subscribe to Reddit Premium. Due to app store policies the app can't offer the opportunity to subscribe from within the app, so the best they can do (on Android, at least, Apple doesn't even allow this) is to direct the user to sign up for an account and buy a premium subscription on Reddit itself first. Assume they get past this hurdle and then discover after a week or two that in order to continue using that app they have to sign up for a new, separate subscription through the app store so that the developer can get paid. I imagine a not insubstantial number of users would get extremely frustrated by all of this and take their frustration out on either the app developers or Reddit.
This could be solved by the app developers paying Reddit a portion of what they collect from the users. If Reddit wants $5/mo for each third-party app user, then the app developers could charge what they want above that amount. e.g., Apollo could charge $7.99/mo, of which Reddit gets $5.00 and Apollo gets $2.99 minus Apple’s App Store cut. Different developers could charge different amounts based on the value they provide, but Reddit would get the same amount per user from every app developer.
Why would it require an increase in the workforce? Automatic provisioning and charging monthly per API key isn’t rocket science. I’m sure they have enough engineers to tackle this if the revenue opportunity is significant.
My Reddit user experience is similar to yours. I paid for rif years ago because it's simple and fast, and I don't want to see ads. I'll gladly pay Reddit for an ad-free experience if I can use an app that's better than their own, but if they don't want to take my money, they'll lose me as a user.
I'd love to be a fly on the wall at Reddit HQ at the moment, also I wonder what it's like to be a dev on the Reddit app too? Don't get me wrong I'm not downplaying how poor the app is (I've gone desktop-only based on how much I dislike it) but it can't be fun having the entire web panning your daily work every time it comes up.
I'm guessing that the devs working on Reddit's app are fully aware of why people talk poorly about it. I'm further guessing that it's the way it is because of requirements being imposed on them rather than their own decisionmaking.
I also have to assume they're fine with it all, or they'd take their skills elsewhere.
- there's a vanishingly small minority who pay for apps
- Apollo volunteered to be the asserter of what 3Ps thought and they were extremely aggro
- It's a Solomon's baby situation, it's a worse outcome from all sides: 3P would be _more_ irate, their customer base gets slashed to nothing. Reddit needs to be able to charge for the API without having elaborate carve-outs for monetization schemes from years ago that didn't work
- People aren't thinking straight and are extremely aggressive in discounting others. Sure, the user generates API calls. That doesn't mean the app doesn't make API calls
Incompetence. Pure and simple. It was clear before Huffman really decided to go full-Elon and it's crystal clear now. He has no business running a company. The revenue that Reddit brough it in 2021 ($350M) should be able to cover the staff and servers for Reddit easily. Of course they got VC money which means you overhire and spend like no tomorrow which is partly to blame (bad leadership being the other). Reddit is just not that complicated and they only things they've put time/resources into in the last few years are gimmicks that no one uses (Chat) and/or gross cash grabs (NFTs) that also lie abandoned all while ignoring what users were asking for until it directly affected them (things like being able to wrest control of a sub from a mod). Also "better mod tools" is pretty much the same as "infrastructure week" to the last US administration.
But yeah, I have zero doubt they could be profitable but they can't be profitable-enough for investors so instead we get this shit.
Tesla is a wildly different story because they're quickly becoming the Apple of cars. They've convinced all the American automakers to use the Tesla charger, they're setting themselves up to basically own road charging
Keep in mind the $44B number was a joke offer he was forced to pay out. He knew it wasn’t worth as much, but he fucked around and found out.
According to NASDAQ, pre-purchase it was around $13B. And Elon claims it’s at $20B. So supposedly he has improved the net worth, but yes obviously he’s still $20B in the hole.
Reddit has never really had a competent CEO and that has never been more apparent than with Steve Huffman who has no background or skill as a leader. He also was never the one responsible for building and fostering the community side of things, that was Alexis’ department. One could argue that even as a developer he was second fiddle to Aaron. “What would you say you do here, Steve?” - The Bobs
I wouldn’t be sad if OpenAi or Google acquired Reddit as a source for training future models. Don’t try to optimize it for advertising, the value is in the human-created content.
That's why Digg 2.0 happened (and destroyed Digg) and why Reddit is hell bent on getting rid of Old Reddit and all 3rd parties that have any experience like it.
You need something like Facebook or Instagram to successfully sell a TON of ads (in social), which is the opposite of what Reddit is.
Either Reddit needs to realize they're not going to make FB money (spoiler, they're not going to accept that) or they're going to try to completely change their product to make FB money (spoiler, it's probably not going to work - if people wanted FB, they'd just use FB, not Reddit).
My crystal ball doesn't work. Who knows what will happen. That's just all my uncreative brain can imagine.
Many (most?) of the categories are not desirable to advertisers and the user base is hostile to advertising.
A google ad that appears when someone searches "car insurance" is very different from an ad in a car insurance subreddit. It's also different from Facebook where you could target based on demographics.
Are you joking? Reddit has hyper-focused niche communities, this should be a cake walk to advertise to. You can see exactly which book series I'm reading, which TV shows I'm watching, what my hobbies are, what my profession is, etc. If you can't figure out how to advertise to Reddit users then I can't help you.
In addition to ads they have Reddit Gold (or whatever their membership program is called, it's bad that I've been on the platform for a decade and I have no idea). They made the same mistake Twitter did with Twitter Blue: "Why would I subscribe?". At least Reddit gives you "No ads", Twitter gives you "Less ads". Ok, so no ads but the UI/UX of the official app is trash, it's messy and inconsistent. If they had said "Buy our subscription to keep using 3rd party apps" I would have paid in a heartbeat.
> You can see exactly which book series I'm reading, which TV shows I'm watching, what my hobbies are, what my profession is, etc. If you can't figure out how to advertise to Reddit users then I can't help you.
These are very bold claims to make, considering that Reddit is at the bottom of every advertiser's priority list, despite being a lot cheaper.
Have you considered that Reddit users simply do not like being advertised to? Asking for a product recommendation on a message board is fundamentally different from seeing an ad for a product on said board.
Not joking at all. Reddit has had a self-service platform that lets you target ads to subreddits for a very long time. Why do you think it's not popular?
If I had to guess, because their self service tools suck and they haven't invested in agency relationships.
If you want a successful internet ad business you need to do one of those, but preferably both.
That being said, it's wild to me that Twitter never managed to build a DR (i.e. selling clicks/conversions) business, so maybe Reddit is equally as badly managed (which again, is really surprising to me).
Advertisers specifically avoid Reddit. Ask anyone who’s run an ad campaign on Reddit vs. literally anywhere else. The conversion rate is absolute trash.
Shockingly, the average Redditor doesn’t have (or isn’t willing to part with their) disposable income.
What’s surprising to me is that usually goodwill burning happens after an acquisition or CEO/VP succession, but Reddit made a bonfire to illuminate their IPO.
Yup, deleted my account, found an alternative for the one community I participated in, and try not click on links to reddit. It was easy as my primary way of interacting with reddit was apollo...
I don't even need to delete my account, I'd be suprised if I didn't get resuspended eventually for like the 16th time at some point this month either when they find out I'm still ban evading or when I inevitably say something the moderation doesn't like again
I got IP banned across my older unused accounts, and my newer ones for mass editing, then deleting my comments to a message that was basically "reddit killed itself due to this API change".
I've been shadow banned several times for linking subreddits relevant to the discussion more then once in a comment section. So I started only sharing it once.
I've also been shadow banned for sharing large lists of on topic youtube links.
I believe I am running into some sort of spam prevention system, even though I see other users posting similar content. So my theory is that there is some sort of whitelist for this activity (i changed my username often when i used reddit), or I am running afoul with a certain moderator or admin.
Hard to tell when you're not even banned so there isn't a reason given to me. Wonderful system.
Back to imgur's user-sub I guess. Also I appreciate yall having me here as well.
One time a guy said disabled people should kill themselves for the good of the gene pool so I told him eugenicists should be publicly flogged and I got banned for inciting violence, and then I got IP banned when I told the moderator there's no point banning me because it's trivial for me to just use another account (in more colorful language). I'm also pretty homophobic & transphobic so I've caught a number of bans for that sort of thing before. My current account is on 1 warning atm cus I said something about feminism, I don't recall what it was.
I'm not sure why you would think being banned should prompt self-reflection? It's not like any of my reasons for believing the things I do has changed, and it's not like being banned from Reddit really has any negative consequences for me.
Getting banned 16 times from a social space is a pretty clear message that you're not welcome. Equivalent behavior in meatspace would likely get you trespassed from the property or arrested.
Is there any evidence this valuation cut has anything to do with the API debacle? Discord slid by about twice as much percentage-wise in the same time, so it seems like Fidelity is seeing this as a market-wide change rather than factoring in anything to do with the reddit revolt.
There's also this, from the article:
> Worth noting that the vast majority of markdown in the value of Reddit and Discord holdings by Fidelity predominantly occurred last year.
Apollo is a for-profit app. They are using reddits technology, servers, and users for free to make money off their own advertisements.
Reddit isn't "losing" any money by losing apollo users, since it wasn't making any money in the first place.
This seems like a billing dispute between two companies, not a user issue. Reddit also announced that modtools will be allowed to use the API free of charge.
At the end of the day, most people log in to reddit once or twice a month. Those are the users that are being targetted by advertisers anyways. The power users and terminally online moderating staff are more of a headache for reddit than a benefit.
> At the end of the day, most people log in to reddit once or twice a month. Those are the users that are being targetted by advertisers anyways
You have this exactly backwards.
Ads work on repeat exposure, aka impressions. Social media companies have no other reason to optimize for user session length.
Also, someone who uses Reddit once/twice a month would not need to have an account to begin with. Even if they did, their lack of activity would be a negative for ad targeting.
Incorrect. Highly active and power users tend to adblockers and are unlikely to click since ad impressions don't mean anything to them. Casual users are the money maker.
People are going into a lot of detail about Reddit here, but I'm not even certain this has anything to do with reddit at all. When you have a holding in a private company you obviously can't just mark to market, so you need a different valuation method. My guess would be that the method in this case is that they take a look at Reddit, find some public comparables (Facebook, Snapchat etc.) apply a fudge factor using the comparable metrics they have, and that's how they do the valuation. I highly doubt they're looking at Reddit each month and making value judgements on the strategy of the CEO. Most likely this valuation move (which isn't huge) is just them reflecting the move in comparables over time rather than re-thinking the valuation of Reddit.
The original article writes:
> giving a preview into how one of the world’s largest asset manager sees the impact of the ongoing slowdown in the public market on privately-held startups
This is correct, this news is showing us what's happening in the market in general, not specific changes in reddit.
The write-down might be fair. But the lesson I see with Reddit, Discord and Twitter is that letting a public company own even a tiny slice of your private company is a terrible idea.
Despite only owning a point or two of multi-billion dollar companies, they implicitly get pricing power over the entire cap table.
>> The founding Johnson family, individually and through various trusts, owns stock representing a 49% voting interest in FMR, and have signed agreements pledging to vote all their shares as a bloc.
>> Most of the remaining 51% of the company is held by various Fidelity employees and ex-employees, including fund managers and ex-managers...
Yes, exactly. Fidelity is a private company just like Reddit and Discord are. There are still shares in the private company held by various owners, but the shares aren't traded publicly, which is what it means to be a public company.
To unify the point that GP was making, it's dangerous to let publicly transparent funds take slices of a private company, as their valuation announcements give them control.
In reality, at this scale, I'm not sure if there's an alternative though. Syndicated investment is required to amass the capital levels needed.
That is the point I was making. You replied to the poster who said "Fidelity is not a public company." with a link to an excerpt about their share representation, which as nothing to do with the point.
This feels like a really backwards way of looking at valuations to me. I would assume Fidelity knows more about how to value a company the size of Reddit or Discord than either of those companies. Valuations are based on reality not the dreams of founders and early investors.
> Worth noting that the vast majority of markdown in the value of Reddit and Discord holdings by Fidelity predominantly occurred last year
Marking down Discord as well. Not sure any of this can be attributed to the blackout. But I wonder if Spez has been slowly feeling the IPO money bleed out and panicked early this year. Maybe that's why he had such a sudden 180 on policies.
There seems to be a general problem with social media as a profitable business models as there don't seem to be any real path for companies to monetize their user base that don't end up causing damage.
Given that Discord and Reddit have an overlapping user base it could be realization that that's not an user base that's either no especially desirable for advertisers or one simply hard to monetize for other reasons.
18-35 year old men is a demographic that is extremely valuable to advertisers. Unfortunately, it also seems to be quite a slippery bunch who shy away from most forms of advertising. They definitely love Steam sales though!
But it's only really an subset of that demographic and i suspect the age spread reaches far lower then 18(reddit might pretend otherwise for regulatory purposes).
And i suspect a reason for the entire debacle is that a lot of the user base weren't seeing ads at all due to ad-blockers or the use of 3rd party apps.
It's a problem that also seems to plague twitch in that they simply aren't generating the revenue that's expected from the amount of traffic generated.
> And i suspect a reason for the entire debacle is that a lot of the user base weren't seeing ads at all due to ad-blockers or the use of 3rd party apps.
Neither of which would be a problem for them if they didn’t remake and destroy the default UX on their desktop and made a functional app.
By pushing users to third party solutions they also pushed them off of the ads. Because if you want a web extension to redirect to “old.reddit.com”, why not throw an adblocker on top?
Everything plays into attention economics and thinking otherwise is naive. Video games are optimized for play time and content, video streaming services try to keep you watching for as long as possible, music streaming services want you listening all day.
> 18-35 year old men is a demographic that is extremely valuable to advertisers. Unfortunately, it also seems to be quite a slippery bunch who shy away from most forms of advertising.
Plus with marriage on the decline, they are more free to spend their own money.
> They definitely love Steam sales though!
Steam does not dictate what socio-political views should be.
They literally could’ve said you’re required to pay for the premium subscription if you want to use third party apps and things would’ve gone over so much more smoothly.
Now they’re facing competition in the fediverse, with apps that remove a lot of the barriers to entry (two iOS apps are currently in test flight and both look VERY promising)
If that was that easy why did the 3rd party apps shutdown rather then raise prices to cover the API fees?
Reddit's model was kind of novel in that they did it in directly by expecting the 3rd party apps to collect the payment from their users but they did essentially just ask people to pay for 3rd party app access.
I cant recall any instance where a social media company successfully extracted actual cash directly from their users that ended well.
if you look at what reddit was asking it kind of evened out to less then $5,- a month pr user which seems to have been so much more then what the 3rd party apps was able/willing to charge that they had to fold.
If you go look at their explanations, the 3rd party apps shut down because there was no transition plan for them to increase the price of only future payments (so, they would need to have billed people more months ago), and the prices were too high for the authors to absorb the loss.
So the authors did the only thing they could, that is returning all of recently billed money and closing their apps down.
The real issue with subscriptions is that it makes it hard/impossible to demonstrate revenue growth from a static userbase.
It's fine for steady state / going concern financing.
But no public or pre-IPO company wants to look like that.
Advertising and engineered products allow you to create new revenue streams from your existing userbase, and because your customer isn't your users (B2B) price increases can be invisible.
That would have been relatively easy to spin if it happened right before IPO though “Look at the last quarter(s) growth in premium subscription fees and MRR!”
Yes, paying premium to use 3PA would have gone over more smoothly yet if you consider how touchy and prone to aggressive posturing a large number of their mostly male userbase is the vocal minority would still have made significant noise about how unfair it is to 'pay-to-play'.
Any sort of significant change to Reddit by any CEO, whether it be Huffman or Santa Claus, was going to illicit a significant toxic response.
What has put me off Reddit more than anything is the level of uncalled vitriol and mean spirited comments by not only the users but the temper tantrums and petulant behaviour by a number of the mods. And when push came to shove most of these mods crumbled like my grandmother's hip after her fall down the stairs.
An intelligent leader would have found a solution that aligned incentives between the company and its users/customers and communicated it in a way that most rational users/customers would accept. I'm a sample size of one, but the freedom to choose my client and maybe some smaller perks would have converted me from a long time free user to a premium user assuming the price was reasonable. Instead it converted me from a free user to a non-user.
Sure, but unlike the current situation it wouldn’t have mattered. Pay for third party apps with free access to them for mods and none of this ever happens. You don’t have widespread blackouts because a handful of people whine about a change like that.
Thinking that Reddit is seeing any viable threat from the "fediverse" is laughable. I think mastadon.social is seeming like a nice place, though I'm worried it's a left wing echo chamber, but do we have any evidence the vast majority of the userbase has left reddit? These are the same millions of people that just scroll r/pics all day, they really won't care if all the """valuable""" content everyone claims is only made by the power users disappears and all that's left is GallowBoob reposting their stash every year interspersed with overt ads and "native" advertising.
I feel like Somethingawful figured it out 25 years ago. You can read a slightly censored version of the site for free, but if you want to post and read the swear words, it'll be $10. If you mouth off too bad and get banned, that's another $10. I guess it doesn't scale to world-eating business size, but I gladly sent them $10.
I'd say Lowtax was more of a hindrance than their business model; especially in retrospect. I always thought the edgy dirtbag thing was a bit of a put-on (which I enjoyed), but I was quite wrong on that, and it's a mistake I've learned not to make again.
Total guesswork as I don't know the guy, but my suspicion as an observer is the money from selling Reddit and Hipmunk was peanuts, he has lots of wealthy friends, and the IPO is a good chance at a big win, despite the downsides.
It's certainly a consequence of interest rates going up. In the words of buffet, Reddit has no pants.
They should have improved their platform and lock useful features behind a paywall, like video and image hosting. They could have made money on their core appeal - hosting communities for people.
Instead, they've bloated their site into an adware riddled clusterfuck, ignored useful features that people actually wanted, and just turned into a hilariously useless company in general, making their site worse with every change instead of better.
We desperately need regulation that kills the network effect that feeds these companies, because it's clear their users aren't the priority.
Reddit isn't that special. Protests like at Reddit could also happen anywhere else. So even if nobody is protesting Discord at the moment, it may still make sense to take the possibility into account.
One of my Discord servers has already taken one look at the Reddit situation and migrated to a self-hosted Matrix server in the pursuit of less corporate captivity (if you're looking for a Matrix client with a Discord-style UX, I recommend Cinny). Of course, these are techies, and not representative of the average user.
Somewhat related question: reddit has been quoted as having around 1,700 employees. Does anyone know how many of those are devs? And how that compares against similar sites/companies?
Reddit has consistently been incredibly slow to fix bugs and implement new features, so I was wondering how dysfunctional their dev teams are.
Iirc most of the devs are building the features that users actively hate like like chats and live streams etc. The tiktokification. Also, ads, of course.
Still though yeah I'd imagine a minority of that number are devs.
Annoyingly they moved into shilling stupid AI ventures which is frustrating a AI has real, legitimate uses in its current form. Now we have a bunch of shills acting like we’ve achieved AGI if only you’d invest in their GPT chatbot
This seems like the problem with capitalism. You start with a company that is providing a great service using 25 people. But it does well so throwing money at it can make it better (and worth more), right?
But not everything has to be worth a lot of money. You could just keep being a great community and double digit employees.
Forcing hyper/non-sustainable growth and then trying to IPO before the crash-and-burn phase is just SOOO much more profitable for everyone involved than continuing to run a good product that is profitable.
If your company is bringing in $100M in profit and you own 10% of the company, it will take you 100 years to make $1B. If you IPO at a $10B valuation and own 10% of the company...
The counterpoint to this is something like Craigslist which has not changed much since its inception and I think is perfect for what it is, but has been overtaken by Facebook marketplace.
My understanding is that Craigslist is still making a tidy profit, and it's owners do well. Sure, they might not need to testify in front of congress or buy all their neighbors land so they can have privacy, but most people consider that a plus.
Reddit was profitable way back. Capitalism would have allowed it to continue on in this state perpetually. Spez got greedy and wanted more money though.
I think this is where it's helpful to draw a line between regular capitalism and the late-stage hypercapitalism we've descended into these days.
My rule of thumb is that it's the difference between "we provide a service or make a product, and if we do it well, then we make money" and "we make money, as much as possible, however possible, and if we have to provide a service or make a product to do it, that's a necessary evil".
I wonder if another way to phrase the distinction would be whether the company's primary goal is to sell a product or service for a profit; or to manage financial instruments, such as a stock price or IPO or debt to some VCs or other investors.
It's not a perfect method, but it seems private company (with no intent to IPO and not a VC funded startup) vs public company seems to be a pretty good indicator of what a companies priorities tend to be.
Isn't the underlying issue one of misaligned incentives, control over resources, and sheer incompetence? This particular expression may be a capitalist flavor, but I am skeptical any economic system prevents or corrects for this.
I interviewed with reddit over 10 years ago and the company had less than 25 people working out of co-working spaces but still maintained uptime and managed to get by just fine. This was before they had advertising, no trust/safety team, no official app, etc.
Regardless, it seems like they managed quite okay with 65x less staff. I guess doing image/video hosting and running a mobile app drastically increased their cloud cost.
The problem with the headcount is that they've had an excessive number of funding rounds and ramping up staff is how to show you're doing something "productive" with the money.
It's insane that they couldn't turn a profit ten years ago. They have a small moat and a well segmented user base. Advertisers should have been coming in droves even before the enshitification of the site.
Hey, OpenAI - this is your moment. $5.5B + 20% premium to acquire the largest, best source of UGC community in history while it's distracted by squabbles over APIs, moderators, etc.
Reverse the API bullshit, remove all the pressures about IPO'ing, and win some positive PR among users.
Not sure that would be good for humanity, but it would probably be good for Reddit users.
I agree with this, except the "positive PR amongst users" - OpenAI is going to want to extract every single piece of information from users without compensating them a single penny. No way they allow something like permanent deletion of comments. And they will obviously be using every single database entry - public or not, to train their LLMs
Back to the main subject. For me the obvious buyers in terms of makes most sense are Meta -> OpenAI -> Shady data broker. Sam Altman is also one of the investors in Reddit
For Meta it goes beyond the data, which is a plus. There are a ton of similarities between FB groups and Reddit. FB groups is even more popular in terms of DAU, and some communities are bigger there than on Reddit. Plus they also utilize free moderation without any uprisings. Owning both communities would be huge for Meta in generating ad $'s
Every privately held company should have its valuation slashed in today's environment. It's just that in most cases founders and VCs aren't willing to admit it and take the hit. If they were all forced to open up their books the reality would be very different to what you see publicly.
Reddit and Discord are private companies, yet because they are held by giant funds which publicize their internal valuations, we get something similar to the valuation heartbeat of a public company's stock price.
That said, how come I'm only seeing this recently? Did something recently change about how Fidelity or other investors publish their info? Or maybe the only thing that has changed is that a lot of companies are losing value, so we're discussing it more.
It’s the latter. Lot’s of companies loosing their zero-interest rate valuation but funds have always needed to mark down swollen private valuations.
Fidelity marks down stake in pre-IPO startups Cloudera, Dropbox
March 30, 2016
https://www.reuters.com/article/us-funds-fidelity-ipo-idUSKC...
Me and a few other moderators of some medium sized subs that we manage are leaving and a few others have been demoralized into doing nothing. We're having trouble finding new mods and the ones who are filling applications are either racists or power mods. The subs are operating in a restricted manner in part as a form of extended protest but in reality mostly because there's no longer enough manpower to run them in an effective manner. When the subs are finally forced to open fully the remaining mods will need to either make moderating their full time job or they will be crushed by a neverending queue of spam and hate and by people asking how to fix their mouse in a software forum.
Interacting with other mod teams we've learned that this mod scarcity is apparently universal.
None of this matters to reddit because in all honesty they would probably be happier and more profitable by converting the website into a read only feed of memes and kittens.
ironically, they would probably be better off creating a chatGPT moderator for each sub, it'd need to probably be programmatically unique to the sub.
The irony being chatGPT wouldn't exist without Reddit data and supposedly the cause of the API updates, even this Sam Altman is on the board of Reddit.
I'd like to build a DAO with a centralized hub which basically models taxonomies for things like channels or tags etc as well as being a central source of truth for usernames and authentications. It'd be fully open source and could be splintered if there's some conflict in the community. For instance racists can get bent and start their own centralized server and be defederated from the core.
What would be funny is if a meme started that Reddit is now hiring moderators, payment is fame and glory. Nazis, Bigots, Hypocrites, Cult leaders welcome, apply within. You know it'd happen. Reddit is about to become voat or worse 4chan 2.0 electric boogaloo.
For people who care about sports and celebrities, it's gotten better. Those people will tell you they haven't noticed a thing, and they're glad the whiny mods are getting kicked.
For people who care about anything else, the quality has dropped off a cliff.
A lot of the cool people have left. Many more will be leaving today once Apollo and RIF are finally murdered. I don't think they'll be coming back very often.
I rarely set out to go to Reddit (in the sense of “my task is to read Reddit”), but I pretty frequently land on Reddit from search results.
I think the Reddit utility was substantially reduced for that use case (too often landing on a closed subreddit) and that damage could last far beyond when this protest ends/is ended.
I sure won’t be adding “reddit” to the end of my search queries for a while!
I'm not boycotting Reddit, but years ago I had to un-train my fingers from unconsciously going to Reddit, because the value had gotten so low (or, on the front page overrun by manipulators years ago, it had negative value).
The following Ublock Origin rules aren't perfect, but they mostly blocked the Reddit main page, which was what muscle memory would go to. While permitting search hits, links from HN, etc.
This is how I've been boycotting Reddit myself; I'll click native google hits, but I won't visit the homepage/any subreddits directly. HN's filled that need somewhat.
I ended up on Reddit from a search result last night and it was slooooooooow. I’m not sure if that’s the new normal but was surprised at how bad the user experience had gotten.
I looked at it recently out of curiosity, and my home page felt basically similar to always, but slower (the content was slower to come, not the site).
It also made me notice that I haven't seen content from any valuable sub in a while, and the entire home was cheap jokes.
I don't use reddit a ton over the last few years and I'm only subbed to a handful of smaller subreddits (biggest is a bit over a million I think) and I haven't noticed a difference.
What's crazy to me is how Discord or Reddit could approach Twitter in valuation? Even if the user base is similar (at least between Discord v Twitter), the target marketing for "FurryFriend558" on Discord must be impossible, whereas lots of twitter folks use their real names n such.
Advertisers don't need real identities to be able to advertise to people. If FurryFriend558 talks about leafblowers a bunch and browses sites with Discord integrations, advertisers will have no problem serving them the latest leafblower deals without a thought about what their real name is.
Good point, I forgot they read all our messages. I suppose in that light all you'd need is some minor classifications (estimate on age, race, sex, etc) and you could tailor ads based on that + their recent messages.
In addition to the point mentioned by the sibling comment, I think there is also an element of "go where the users are", by which I mean that if FurryFriend558 spends 10x or 50x more time on Reddit or Discord, even if the ads are less effective the total effect is still higher.
Prior to dropping Reddit recently, I certainly spent more than two orders more time there than on Twitter.
Discord's business model doesn't rely on advertising. A company's value has nothing to do with the number of users it has and everything to do with how much money it can make, so it's theoretically possible for Discord to be more valuable with a much smaller user base if the users are much more willing to pay.
>And now tell me again that the Reddit Blackout had now effect.
So, no, the blackout did not cause this drop in valuation. I'd urge you to read the article before shooting from the hip. From the article:
>Fidelity Blue Chip Growth Fund valued its holdings in Reddit at $15.4 million as of May 31, according to the fund’s monthly disclosure released Friday. That’s down 7.36% from $16.6 million mark at April’s closure and altogether a slide of 45.4% since its investment in August 2021.
Followed by:
>(Worth noting that the vast majority of markdown in the value of Reddit and Discord holdings by Fidelity predominantly occurred last year.)
So, May 31st is when they dropped the value of Reddit. That's prior to the blackout chaos, which occurred in June. Apollo didn't receive notice of the cost changes until the 31st, and didn't announce it was shutting down until the 8th. The blackout occurred after those dates.
So, the blackout devaluation is likely magnitudes higher, considering daily ad center traffic dropped substantially since the blackout as advertisers are weary of advertising on the toxic site now.
Also considering the Reddit brand which IMHO rightfully was way better than the rest of social media (at least until recent events), has now started to make Facebook look good.
The CEO is acting like a Musk fanboy who drank the Kool aid, and is modeling his social media company after a company ran by a guy who's worked administering a social media company for less than a year. I mean, verdict is out on if Twitter will go up or down in value. Why hitch yourself to that train?
These write downs are likely a byproduct of the macro environment. The cheap money has run out and the stock market is taking a hit as interest rates have climbed. Fidelity's valuations reflect what they believe they can sell their share for, and now they believe they'd sell it for less.
If anything, my bet is Spez has been seeing that writing on the wall for a while (either because he read the tea leaves or because of signalling from Reddit's investors) and the API pricing changes are part of a desperate strategy to boost cashflow and hopefully goose their valuation in advance of a hoped-for IPO.
If the API changes were meant to actually drive revenue rather than to simply put 3rd party apps out of business, then the incompetence in reddit is stronger than I previously imagined.
Every single move they have made regarding this change has been the wrong one. Incompetence is reddit's lifeblood, from an outside perspective.
> If the API changes were meant to actually drive revenue rather than to simply put 3rd party apps out of business...
I can't think of a good reason to want to put 3PAs out of business given, based on what we know, those users represent a small minority of total Reddit users (and therefore a small fraction of ad impressions).
So the only logical conclusion, to me, is that they see revenue potential on monetizing API access, and 3PAs just happen to be in the blast radius.
I'm not saying they'll ultimately be right. All I'm saying is, on its face, it does make sense.
Given that the reason there were protest was that reddit wanted to monetize a part of their platform that was not generating ad revenue those two things could be completely related.
if reddit cannot monetize their users, either as a product to sell to advertisers or by converting them to paying customers it's might not be viable as a profitable business.
yeah, this seems like a mark to market change (the market just isn't paying as much as it used to) and is lagging by a few months. The impact of the blackout hasn't been quantified yet by investors and probably not even internally at this point.
if I were on the board I would be voting to fire him asap. you've successfully fomented a site wide revolt in the year you're trying to IPO. unacceptable.
