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When I look at those numbers I think “Apollo was made by 1 dude with some occasional help from another person. Reddit is throwing half its budget and 200+ bodies at its app and site, and it’s a fucking disaster.”
Different goals. The goal of Apollo was to make a good app. The goal of the official reddit app is to show you ads and siphon money off you.
I guarantee you a good chunk of that R&D money is for making ads more profitable and other monetization.
To be fair, the point of Apollo was to also make money. But it was to make money by selling you things that made a nice experience nicer. Reddit makes money by selling you stuff that makes a shitty experience slightly less shitty.
I said it before on Reddit and I will say it again here—
If Reddit has asked me for a premium subscription to use my favourite third-party app, I would have fucking paid.
Just bad business all around
I don’t know the right price point, but 1 dollar a month probably would have worked for most people. It just wasn’t enough because they probably can make more than 1 by spoon feeding you ads now.
I’d go as far as 5 dollars a month, which is more than the buck thirty they make off users right now.
It just boggles the mind.
They had the userbase. They had the community moderation. They had the power-users basically doing their job for them. They could have had a bulletproof, tied-to-world-population-growth metric - not super fast, but basically monotonically increasing. They basically could have turned it into a sustainable money printer, while not crushing user enthusiasm. Hell, they could have even done an opt- in policy for ML training datasets, either offsetting or outright paying users a commission for content that’s used as part of a training set. There were so many possibilities that didn’t involve pointing the ship at an iceberg.
Spez threw it away because he wanted the quick payout from ad revenue.
Spez threw it away because he’s a libertarian tool. He doesn’t care how he gets the payout as long as it’s not ‘collectivist’. This commie shit your’e spouting in this post would not impress daddy Elon. GTFO.
Active users would, I probably would too. Problem is most apps would struggle to even get new users with that system.
100% I did pay for the premium version of Apollo and I absolutely would have paid about £20 a month for access.
It was the #1 most used app on all my devices.
20 a month?! No way in hell reddit app access is worth that.
Not now perhaps, but then it was. To me. I’d not pay them a farthing now.
Same here. I spend all my farthings at the taffee shoppe, or the cobblers.
I‘d say about £5 a month would be suitable for lurkers, with additional options for when your "contingent“ is used up
Didn’t that become an option at some point? I’m sure I’ve read there are apps you can pay for to have access. Fuck that, though. Make it a reasonable price, too, and I’d listen. No way I’m paying a fiver a month for reddit. Maye 1 or 2.
Apps can pay in a ridiculous deal that no app would be able to support. So you either be a pay app that no one downloads, or a free app that gets killed the second it gets too big (And that number was low)
Recently I stumbled on Relay, still going strong with a subscription model (because API fees).
That said, I refuse to return to that platform.
You can patch old third-party apps with ReVanced. That being said, they are unmaintained and will still eventually break.
The funny ouroborous here is new reddit is shitty because no one at reddit team actually use it to know it.
Yeah, but the Apollo dev didn’t have the huge server costs that Reddit has. I’m not defending Reddit at all, but this is just comparing apples to oranges.
Server costs don’t force you to make a bloated and shitty app experience. You might have an argument that 3rd party apps put strain on the servers, but that’s just reddits fault for making an awful and borderline unusable UX.
I think he’s arguing that the organization, being several hundred times bigger, makes it a lot harder to focus on one thing, like making the app awesome.
As an example, in an hour long meeting you’d spend x% of the time on server costs, another y% on, i dunno, legal, another % on how to enshittify, and finally 5 minutes on the app.
The goal of Apollo was to make a good app. The goal of the official reddit app is to show you ads and siphon money off you.
Spot fucking on.
Ever have a good app? Something you like using but it’s by a corporation but that’s ok, because it’s a good app and does what you want? And then they start adding more features to it, and it slows down, and it’s more annoying and it keeps offering services you don’t want, and it changes and it morphs and it becomes a shit app.
Hell I’ve watched Whisk become something I liked using to something worthless now it’s Samsung food… Switched to using CopyMeThat which actually also gets me recipes from sites that you can’t just read the recipes from, and that’s ALL it does (well recipe book/shopping cart/meal planning, which is what it’s designed for.)
I’m just sick of “How do we make more money” instead of just being an app that does what it says. Gaming is going down the same hole, sadly.
This is the inevitable long term goal and result of capitalism.
This is the result of shareholders. Capitalism doesn’t have to turn into this and people can have small businesses that are comfortable and don’t grow. But when you get investment involve the question is always “how do you ‘grow this business’ so I can get a ROI”.
There’s a few cases where that’s not the case, but the majority of the mindset of the modern business world is fast returns, rather than sustainable growth.
Always going to upvote someone talking about CopyMeThat. Been a premium member for over a decade, it was a game changer for us.
I also quit whisk when it became samsung food. Does CopyMeThat let you have shared lists with other people?
It does have a “Community” aspect, but honestly I think it’s quite weak on that. however if you have someone you know and their recipes are public you can see them, but not in any organized sense.
Dang, the shared grocery list and meal planning was the best part of it.
My wife and I just share our account which has worked perfect though I’m really the one who cooks so the recipe list becomes mine as well.
That sounds nice, I’ll try that out
I get your point and you’re not wrong, technically . Technically that is what Reddit is trying to do but you need to remember that this is Reddit. They fucking suuuuuck at everything.
I remember years ago a disaffected ex employee wrote something about what it’s like to work the and in just remember thinking to myself: “Imagine going in to work and they call an important meeting, all hands, to discuss “brigading” and then, without an ounce of irony they proceed to sternly discuss this important topic.”
Just imagine those little snot nosed shots puffed up with so much self importance discussing how these “brigades” are destroying their “bastion of free speech”.
I thought I was going to pule in my own mouth again just typing this.
We just have to look at how much the CEO and COO paid themselves last year to know the whole thing is just a huge grift.
The comparison is even more apt when you remember that the official Reddit app also used to be the most popular and great 3rd-party app called AlienBlue, which was purchased from 1 guy and rebranded a decade ago.
It’s pretty clear that the reason why the official Reddit app isn’t good is because a good experience for their users isn’t their goal.
The fact that the app is still so bad after so much time has gone by indicates that it is the desired product that the company wants to offer. And after realizing that they were still losing users to better competitors, their solution was to destroy the ability to compete in the first place rather than improve the product.
They like the app as-is, with all of the terrible performance and UX that goes along with it. The reason behind that is because they’re getting user engagement metrics and other telemetry data, more control over ad delivery and the content users see (including astroturfed sponsored Reddit content), and more monetization.
Third party apps, like Apollo and AlienBlue before it, cared about providing a good user experience. It just happens that users typically prefer experiences that aren’t trying to capitalize their every interaction, and companies take that personally.
I’ve started using Geddit, a 3rd party app that doesn’t use the Reddit API. And it’s still better than the app they develop in-house.
I rarely visit Reddit, but when searching for something niche there always seems to be a few threads over there sadly.
Alien Blue wasn’t rebranded. They bought it, called it the official app (with the name Alien Blue) for a little while, then launched their own app and stopped supporting AB.
Oh I see; I knew they stopped supporting it after a while but I thought the official app was a descendent of that codebase
If it was, it might actually be useable
Yeah I paid for alien blue pro or whatever it was called. Then they killed the app and gave me a year of Reddit premium (my memory is shit, idk the proper name). After a month or so I switched to Apollo, Reddit’s app was just so shit. I left when Apollo died and now only use dystopia (an app designed for blind users) for the infrequent times I visit Reddit. No adds. It’s almost read only. But it’s ideal for visiting niche subs that aren’t on lemmy without giving Reddit clicks/seeing ads.
You can also see this with the old website being much better than the new one and apparently there’s an even newer one that people who like the old new one generally hate.
a good experience for their users isn’t their goal
They are in tension with the more pressing goal of extracting revenue. But how do you extract revenue from a site that’s mostly just “user content” + “ads” in an era when ad revenue is plummeting?
Maybe if they increase the prices on Reddit Gold?
They got rid of Reddit Gold and other awards. It’s now “super upvotes” or something to that effect.
Another difference was I was willing to pay for Apollo, whereas I don’t want to spend a dime on Reddit.
2000
Reddit has over 2000 employees.
This is one of those things where, I totally feel for all the big tech employees who’ve been laid off, and it is ultimately the fault of the companies, but like, that’s just too much.
Reddit doesn’t need 150 people at best, and you really don’t need 2,000 programmers let alone 30. They’re all doing ad sales probably.
LOOK AT THE QUALITY OF REDDIT’S ADS AND TELL ME THAT’S A GOOD USE OF 2,000 PEOPLE
And so many unpaid moderators… Which is an acceptable trade when the site isn’t cashing in on your work.
The API was a fair trade. When they killed it and decided to make LLM money, that was it for me. It wouldn’t matter if they paid me for my contributions (which they aren’t, they want redditors to pay for their exit with stock), the API and free access was the social contract. Its gone. Reddit can fuck off at this point.
Wtf are they even doing.
Not moderating that’s for sure
At least until they can automate them
Seriously. Reddit is a glorified link sharing service with comments looking for a 6+ billion valuation. Christian and a couple backend devs could recreate it all in a weekend.
Reddit is hopeful that AI training is their golden ticket but in all reality they’ll only ever have one large buyer. OpenAI, Anthropic, Mistral, etc, don’t want something that Gemini already bought.
With all that out of the way, I don’t see very many companies lining up to license a far left-leaning dataset that had all non-echo chamber discussion banned. I mean, look at how much trouble Google got in with an objectively racist Gemini that forced them to turn off human image generation.
Depends on the sub. The news, technology, and politics subs are 99% link sharing. The subs around DIY stuff, health, etc are often people sharing personal experience and advice. The latter is likely the most valuable thing for AI to crawl.
With all that out of the way, I don’t see very many companies lining up to license a far left-leaning dataset that had all non-echo chamber discussion banned.
Maybe this isn’t what you are saying, but Reddit (at least in the past, on smaller more expert subreddits) is no more an echo chamber than any other politically charged community space online, it’s just in other communities the rightwing people who control the levers of power usually don’t let leftists have any kind of voice or power in the first place.
Apollo… the wound that never heals.
This is one of those rare cases where what is being said is less interesting than who says it.
What: Reddit stock is junk, the IPO will fail hard, and anyone investing on it is begging to lose money. I believe that most people discussing this in Lemmy already know that, so the info isn’t new here.
Who: Forbes. Forbes’ target audience is investors; greedy vulture capitalists love it. So if Forbes says “it’ll sink!”, investors are less eager to buy stock, and that sinks the stonks even further. So what Forbes says is often a self-fulfilling prophecy.
I’m glad that Forbes is doing it. I want to see Reddit die.
EDIT: as other posters are correctly highlighting, I derped - the article is from a “contributor”, and it has basically no impact or visibility.
Damn - now I want Forbes shitting on the IPO!
Note that this is a “contributor” post, which is essentially their sneaky wording for editorial. It isn’t a real Forbes article and anyone that knows the Forbes website won’t pay any attention to the article.
Very important distinction! Even I’ve written “contributor” posts on behalf is a company when I was moon lighting for a block chain startup. They’re not quite ads, but you very much can buy your way into that.
Good catch - I didn’t pay attention to the fact that it’s a contributor post. Even then, I believe it to be still exposing the “Reddit is junk stock” (implied: “don’t buy it!”) discourse to potential investors. The title alone already does it, for those who skip past the article.
It will still have made the rounds, since it trended on HN: https://news.ycombinator.com/item?id=39667026
Great piece of marketing to have someone write the article, have people talk about it mistakenly as an actual Forbes article and drive interest in the stock that will make many clueless individuals suddenly have an interest in Reddit Stock.
News is news … any news whether good or bad, especially if it is controversial and agitates people, is good news for the company pushing their name.
Chances are … it was Reddit company marketers that set up this article to be featured on the Forbes website to drive attention to their company and their upcoming IPO.
“Forbes” is not the Forbes you are referring to. It’s a blogging platform that shows the forbes name and claims they’re “Contributors” but isn’t actually “Forbes Magazine” which is what investors actually trust.
Basically this is just some shitbag pretending to be classy by hiding behind someone who sold him that space. There’s a ton of shit Video Game “Articles” on the site too, same story(masquerade), same value (low) , same respectability (none)
Don’t talk shit about Paul Tassi, he’s the best thing they have going on that part of the site (when he’s not going off about Dedstiny 2)
One of the most convincing points is …
competition has had many years to acquire Reddit prior to this IPO and have chosen not too. Acquiring Reddit now wouldn’t create all that much value for a competing social platform.
I sure as hell wouldn’t acquire a company for a product that has a near identical, free, open-source alternative that’s in active use.
Well, at least one person thought it was a good idea to acquire a Mastodon competitor, and they paid a pretty penny for it
Compare to Lemmy’s userbase, which is anti-capitalist and clearly has a bone to pick with reddit. If I had to value Lemmy it would be for the cost of hardware and operations alone.
Which is kinda what Reddit should be valued at, because its a community oriented site, the value is never in the contributions. You can’t guarantee their engagement. They can always pack up and leave. Anyone thinking there’s a value in community oriented sites is being fooled.
I know people are gonna think “daaaamn, you just shit over lemmy too” but Lemmy makes no illusion of it, its a community funded effort, so the product offering is going to be suited to its audience, and this helps engagement. Reddit has no greater objective than tricking advertisers that people will visit.
0.1% of the users isn’t exactly a threat to their model.
Just like Reddit wasn’t a threat to Digg.
The scale is immensely and massively different. Modern social media is not going away, the digg phenomena was one driven by a much smaller number of more passionate users.
That much smaller number of more passionate users has already left Reddit.
I absolutely would, for the users. But only if the userbase wasn’t full of Nazis and pedophiles, so reddit is still a no for me.
Yes it’s a bit confusing with that “Forbes” name?
But the article is good IMO, and has many 100% valid points.
I think the company may never monetize its platform without angering its users and the entire premise of Reddit is user-generated content.
Yep.
Also - reddit spends 55% of it’s budget on R&D?! WTAF!?!
A decent search tool is right around the corner.
Unironically, yes. As part of Reddit’s deal with Google, they’re supposed to get access to some of Google’s search tools.
site:reddit.com
Have you ever tried to find something on a corporate Google drive?
It’s kind of impressive how bad Google is at search these days.
So, they are likely very poorly managed but, R&D is a common slushfund to keep your profit negative so you don’t have to pay taxes.
which makes sense if the r&d gives return on investment.
otherwise you’d be better off paying tax and taking the profits anyway.
Delivering ads to people who are armed up to the teeth with adblockers requires quite some research effort.
It’s expensive to research and develop Spez’s apocalypse bunker.
Or as I like to call it: Super Weenie Hut Jr.
Nowadays it’s llm powered bots all the way down.
Shouldn’t most of a midsize tech company’s budget be that?
That said, they’re terrible at it. And having worked with some of the folks they hired, I’m not totally surprised.
What else do you think they should spend their money on?
Serious question, they’re a social media site, their whole goal is to sell ads to consumers, which is all R&D cost and server cost. User acquisition at this point is minimal, Sales is basically “We have a lot of users, want to talk to them.” The goal is to create ways that sales can sell to consumers to make money.
Doesn’t help the consumer base is actively hostile to advertisements.
Their pre order ipo is wanting and planning on like $31 to $34 a share. I’m thinking no.
0.031 sounds more realistic
It’s not quite that bad, the author buries this near the end:
There’s 97%+ Downside if Growth Matches 2023
Which if I read that correctly means he thinks a fair valuation of the stock is about 90 cents.
0.00000031 more like
Stocks are basically a percentage of ownership. The share price as a dollar amount is meaningless because it could be 1% of a company or 0.000000001%. The relevant number here is that Reddit is IPOing at a valuation of $5 billion (that stock buys a ¹⁄₁₅₀₀₀₀₀₀₀ interest), which all I can reply with is hahahahahahahaha
I am aware. It’s valuation was in the article.
Well, either two values give the third. All one’s gotta know is two of: valuation, price per share, number of shares.
$6.5B valuation (assuming a standard 20x EPS model) should imply in the neighborhood of $325M/year in revenue from a company that makes about a third of that.
Either Reddit plans on tripling its revenues in the near future or this is an unrealistic target.
It’s a sham, imo. I was on reddit for 15 years. It has peaked already. They won’t be able to get more for ads and I don’t believe their data for AI will go higher than what they’ve gotten for it this year. The only way they’ll be worth more is to cut overhead.
What could have been done to increase the valuation higher and maintain goodwill with the community:
- Cut CEO pay by 90%
- Pay mods as employees, think of the GM/guide structure of early mmos where you start as a volunteer for a free sub but can work your way up
- Subscriptions to remove ads
- Push ads in API for third party apps to host your ads, remove for subscribed users
- Profit sharing from ads and subs with top content creators
It baffles me they didn’t take the obvious approach of offering apps/API access for Premium users, only turning it into a billable thing for LLMs. They’re not going to pay for the API, they will scrape the site. Your users will! That’s a great source of revenue that can last as long as reddit does.
But no, they wanted that LLM money.
They’re just looking to cash out and run. They don’t care about anything to do with the actual service anymore.
The refusal to seriously explore cross API marketing is absolutely nuts to me. That’s reddit’s billion dollar innovation and it was right there. Everything was in place, and it would have legitimately set reddit apart from every other shitty social media marketing paradigm, and would have been an actual game changing innovation.
All they needed was to put some actual engineering effort into it. Which I guess explains why they didn’t even fucking try.
Just imagine having a website that makes no money, and you get paid so much to run it that if you got a 90% pay cut and quit after a year you’d still be set for life.
Capitalism.
Basically entities flush with wealth do not make their decisions out of a sense of economic survival.
Capitalism is all about brutal survival for the lower classes and for the upstarts without any background.
At the same time capitalism is all about a decision making process that is leisurely, capricious, and forgiving for the aristocratic upper classes.
If the company is sufficiently large (don’t know if reddit qualifies, but my past employers have, so speaking from experience here), their own upper management is robbing the company on the inside every day when they make deals with contractors by taking kickbacks as opposed to what benefits the company. Make no mistake, all the upper management that is sufficiently aristocratic are looking out for their personal interests instead of the company’s. In other words the same mentality of personal gain at all costs that supposedly drives the creation of some of the companies is also their undoing. “Greed is good” capitalism eats itself. Large ultra consolidated/merged corps are every bit as bureaucratic and internally Machiavellian as any government can hope to be. Their very existence is a tax we all pay and we don’t get a vote about how these corporate fiefdoms run both themselves and us.
Reddit at this point is a very important and well backed propaganda tool, the backers can afford to pay their CEO and there is no hurry to make profits, and they have plenty of time and resources for every manner of business mistake.
Mods could be paid on a bounty system with salary or clocked hourly higher-tier mods to oversee moderation to prevent scamming. The higher tier mods would be paid more based on traffic with that ad profit sharing model.
Or maintain a flat general rate across the board for all mods … make it a liveable wage so that it is worth it to everyone.
This way, moderating can’t be monetized or gamed to drive nonsense content just to drive up the income of a small group of people. If you award moderation with even more money … then the whole system eventually becomes generating whatever content, bots and artificial popularity just to make money … rather than in just maintaining an equal well paid workforce that all work to maintain the service as it is and let the users develop the content based on actual interests and popularity.
But what do I know … the world is just set up to make money and no amount of common sense will ever be implemented if the whole system is perpetually set up to just award those that can make as much money as possible no matter what.
The bounty mods that are incentivized to act are kept in-check by the salary mods who have a base pay determined by number of bounty mods(which is determined by user metrics) with volume bonuses. The salary mods primary responsibility is oversight and only have incentive to increase traffic, which can be kept in-check by bot limits per active users so the mods can’t botfarm base pay or bonuses via traffic metrics.
Bounty mods would be established community members supplementing income, salary mods would be would be established members of the community who had a solid track record as a bounty mod.
Just having low-level mods paid a living wage creates waste or overwork as they either get paid to do almost nothing or have to have multiple subs they maintain, which means less focus. If they have a certain number of subs that they have to maintain, they may not have the interest or knowledge of their subs to effectively mod them.
Higher-tier mods would have the same issues but at a higher pay scale, workload, and cost. Not having a higher-tier mod would mean no oversight for the actions of mods except outside of the sub community with people who don’t have an active involvement and understanding of that sub community.
That leaves the actual company to act as oversight and investigate suspicious activity within a sub’s numbers which indicates some malfeasance. If the numbers aren’t genuine, then that harms the profitability of the company because they are paying more for a salary mod and bounty mod than they rightfully deserve.
What you don’t know is how a sustainable and effective business or people work. You can’t expect everybody to be honest and hard working withithout adequate compensation driving that and you need limits to keep bad actors in-check or flagged for removal. You can’t pay people to do less than the value their labor creates and you cant pay people more than the value they creates, that is inviable due to turnover and unsustainability respectively. An unsustainable business leaves the company to derrive sustainable income via alternative revenue outside of their core business like selling user data and rampant ads, which is harmful to the users(See: Reddit).
Or maintain a flat general rate across the board for all mods … make it a liveable wage so that it is worth it to everyone.
Within a few years almost all of reddit’s mods would be from China or other 3rd world country.
Revert to the source code of about 10 years ago and get rid of most programmers. The only positive change in the last 10 years is the ability of users to ban people from harassing you.
Allow all subs to identify other subs they are similar too, and link all that information together so that users who don’t like how sub is moderated can find an official list of alternative subs.
Allow only temporary bans, not permanent bans from mods. Admins can still give permanent bans for bad faith or dishonest actors and should do so for foreign governments trying to influence other countries.
Allow subs to optionally require flair identifying citizenships and if you are found to be dishonest you can get site ban.
Get rid of certain pieces of automod functionality that subtract value for the users of the site.
Oh just Forbes totally destroying Reddit.
Dude does NOT like reddit. I wonder which app he liked?
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That you, Steve Huffman?
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More specifically, Reddit notes in its S-1 that, as an emerging growth company, it will:
- present only two years of audited financial statements in the S-1,
- not be required to obtain an auditor’s attestation report on the company’s internal controls over financial reporting requirements of the Sarbanes-Oxley Act,
- provide less extensive disclosure about executive compensation arrangements, and
- will not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements,
That sure sounds like a solid investment
Also, the two classes of shares (new shares get 1 vote per share, existing shareholders get 10 per share)… what the fuck. Why would anyone buy that shit
No wonder they are trying to sell it to redditors.
Great article and very thorough, if you have interest in the subject, I’d say it’s a must read, despite the source. And I 100% agree that reddit would be a very risky stock to buy, with more chance of becoming worthless than actually make you money.
This is completely disregarding my personal opinion that reddit quality has deteriorated for years, because sometimes even poor quality can be a great money maker, when it has achieved market dominance or critical mass in its segment, and no doubt reddit has done that.
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Future penny stock.
I think it’s worth less than that. But “reddit gold stock” doesn’t roll off the tongue as well.
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Only if the the accurate bot population is never disclosed. If people found out how much of Reddit is bots, the value would drop.
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Yeah, they are getting that Google bump. Honestly I’d have bought a bit of IPO stock if it didn’t require giving reddit my real info. I’m not that desperate though.
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I’ve never shorted a stock before, but this is looking like a solid play.
Return Of
It never left, bro.
Extremely well written and put together. Still, as harsh as it is, I think the author was still not harsh enough.
Ditch reddit, join lemmy!
It’s a hard call on Reddit.
This article seems to leave out the reality that Reddit’s big win is data and an in built machine learning capability in what is good quality. For future AI and LLMs it’s actually a treasure trove of information that will only rise in value.
Realistically it’s had massively bad PR and issues but people still use it over Lemmy and many others, and Lemmy/others aren’t going to overcome it any time soon (if ever). So it doesn’t seem like it’s going to go away at end of day, and it’s still one of the best sources of information on the internet available.
At end of day it’s stocks so it’s coin flips all the way. No one beats the market consistently over time that doesn’t also utilise insider information.
“[moderators] may be able to leverage their influence within those communities to change the dynamics of the discourse within the communities or to disrupt the normal operation of their communities or other communities on our platform.”
And they can give you rando-bans out of nowhere, suddenly cutting you off from your topic of interest and exposing serious flaws with the entire site.
