Defined by many as “The internet homepage”Reddit is one of the most important websites in the world, perhaps not so much by numbers, but certainly by influence.
Founded 15 years ago by Steve Huffman (today its current CEO) and Alexis Ohanian (who recently resigned after controversies over the lack of visibility of different races on the platform) when they were classmates at the University of Virginia. Its growth in popularity was dazzling, and was soon bought by Advance Publications, a media company that still owns the majority of its shares today.
But how does a forum make money, after all, however influential it is? Well, although they have tried to reinvent the wheel a few times, Reddit continues to build on what the same formula with which most content websites obtain their income: advertising, both programmatic and dedicated.
Of course, in recent years Reddit has achieved a maturity in its accounts that it had not achieved until then. With more than 500 million monthly users, since 2018 it has been achieving about 100 million net income, and its valuation has risen above 3,000 million dollars.
A bet on video
Reddit + Dubsmash
This change in his finances is partly due to the investment he received in 2017 from Andreessen Horowitz and Sequoia Capital. About $ 200 million destined to try to get on the bandwagon of the video that seems to have taken place now: when Reddit announced the purchase of Dubsmah, a rival short video app to TikTok.
The price of the operation has not been finalized, but it is expected that Dubmash and its tools integrate into Reddit, in an attempt to keep the recruitment of new users alive – especially younger ones – and compete in the league of large advertisers just like social networks do.
What is Reddit’s business like
Reddit has a system for advertisers similar to that of Facebook or Twitter, which in its case allows you to segment your ads by targeting a specific subreddit.
The fee typically starts at $ 5 per thousand page views and can go much higher depending on the popularity of the subreddit. The higher the number of page views, the higher the number.
Other tests with premium membership
Reddit also offers a membership that improves the user experience by removing ads, offering its virtual currencies with which you can reward comments or even access to subreddits. only accessible to paid users.
The ‘coin’ or coins also have their own system. Even though you can receive 700 coins every month with the Reddit Premium Membership, there is also the option to buy them without becoming a premium member. You can use these coins to reward users who have made a good post or comment with prizes ranging from $ 0.4 to $ 5.99.
Reddit: A business yet to be established
Although not being a listed company the Reddit accounts are not public, the reports that speak of 100 million income per year do not leave it too well compared to other social platforms.
Twitter, for example, which does not pass for being the most prosperous network, got around 600 million in earnings in just one quarter last year with a similar number of users.
For now, it seems that Reddit, while advertising is the main source of income, has not exploited it in order to keep your redditors happy and with a good user experience.
Nor does it have a data-driven business like most networks and apps. Reddit does not require email addresses and does not track personal information. With them you can think that the platform is literally sacrificing profits to keep their users happy.
Also, all auto-play ads with video are disabled on the website which keeps Reddit whitelisted from a bunch of ad blockers.
The article The business behind Reddit: the forum forum wants to compete with the big apps was published in Explica.co.