TheSmartDudeIf I go on the reddit website and scroll through posts without doing anything else, would that affect Reddit's ad revenue, or is it insignificant to Reddit?
A lot of people are incorrectly obsessing over Reddit’s revenue
A social media platform IPO valuation is based on a speculative value… A “reasonable prediction of potential value”, and that is driven primarily by traffic and engagement metrics.
So, unfortunately, even a “read only with blocked ads” interaction w/ Reddit would still be helping Bost IPO value.
atlhartSpez has been correctly advised that investors are going to be concerned with profitability, or at least a viable pathway to profitability.
There’s a huge startup bubble starting to burst. Companies reliant on cheap money to supplement a business model that at best is years away from profitability but in some cases decades or will never be profitable.
Uber and Doordash IPO’d when money was cheap and investors were fine with speculating on these disruptive, yet unprofitable, companies.
I work broadly in the VC funded start-up world. Money is running out. All of these companies are trying to commercialize, even if the product isn’t fully ready, because they have to show revenue and there has to be path to profitability of that revenue.
In this context, Reddit is more like these startups. They’ve been funded by investors, including big ones like Condé Nast and Ten Cent, but now the chickens are coming home to roost.
It is for sure going to be a shitshow.
Even if we want to talk about the IPO in the context of profitability, spez’ decisions are still pretty bad.
Forget revenue for a second and look at expenses. Reddit has had a long chain of extremely foolish expensive endeavours. They keep investing dev effort into things like snoovatars, becoming a content host (images videos), trying to roll thier own video player, creating “spaces” which failed miserably. The resistance to even using their new UX is very high, old.reddit still is in massive use simply because their new UX isn’t very good.
Reddit has been obsessed with throwing money away on things that aren’t making them any money, and aren’t driving site traffic or engagement.
The clearest path to profitability for Reddit isn’t about trying to invent notional revenue with an API pricing structure that nobody will actually pay for… But instead simply stopping spending money on pointless development.
In fact, I think this whole stunt will have backfired in the sense that if he hadn’t made this API pricing mistake, IPO investors may have believed it was an opportunity for improved revenue. I expect that when the dust settles, spez will have instead proven that it ISN’T a significant untapped opportunity to be had.