Reddit Is Finally Profitable
Reddit just turned a profit for the first time. As part of its third quarter earnings results released on Tuesday, the company reported a profit of $29.9 million, along with $348.4 million in revenue — a 68 percent increase year over year.
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Reddit’s advertising revenue grew to $315.1 million, while “other” revenue reached $33.2 million on account of “data licensing agreements signed earlier this year.” Both Google and OpenAI have cut deals with Reddit to train their AI models on its posts.
In a letter to shareholders, Reddit CEO Steve Huffman attributed the recent increase in users to the platform’s AI-powered translation feature. Reddit started letting users translate posts into French last year before expanding to Spanish, Portuguese, Italian, and German.
Both Reddit and Netflix reaping massive financial benefits from user hostile moves like banning 3rd party apps and blocking password sharing is setting an interesting precedent.
Reddit’s daily users increased 47% year over year, and there was an interesting anecdote in their shareholder letter:
“Reddit” was the sixth most Googled word in the US. With AI slop increasingly prevalent, Reddit is largely seen as an source of human information and stories.
Previously:
- Autoenshittification, YouTube, and Disenshittify or Die
- Social Media AI Training
- Only Google Can Crawl Reddit
- Reddit AI Training Data and IPO
- Reddit API AMA and User Revolt
- Netflix Ads, Password Sharing, and DVDs
- Google Search Is Dying
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I think Jack nailed it. I don’t use Reddit more for any other reason than it’s become the only sane way to use most search engines anymore. They’ll feel emboldened by the user-hostile moves they made, but it was other companies’ user-hostile moves that really gave them a lane.
This makes me very sad. Further proof that user hostile behavior is rewarded, and it’s only going to get worse. Doesn’t matter how bad the site is, what’s taken away, how many pop ups interrupting your train of thought, none of it matters. Somehow the advertising money keeps rolling in.
Though in this case it’s interesting to note that all of their profit seems to have come from selling out their users for AI training.
Reddit keeps making short term decisions that are awful for users but keep making them money via Wall Street.
It makes me feel hopeless for the future of computing.
Reddit has lost most relevance for me, so this doesn't really provoke much of a reaction in me. I still browse it idly sometimes, but my list of subreddits has dwindled massively as I keep removing ones that had content that was boring, corporate controlled, riddled with abominable groupthink, toxic, propagandistic, full of advertisements, or just crappy. There's not much left after that. It's a shallow husk of what it was 15 years ago.
Luckily it is still good for certain kinds of technical questions or support. I don't expect that to last much longer. The people currently in control of reddit are obviously going to run it into the ground.
If they ever finally switch off old.reddit.com then I will immediately cease using it.
"Reddit is largely seen as an source of human information and stories"
Reddit is also full of AI slop and state-sponsored propaganda, but unlike other sites like Facebook or Twitter, where the gullible amplify and redistribute that kind of content, Reddit's users seem reasonably good at detecting that type of content and downvoting it - for now.
As long as "Old Reddit" keeps working, I'll probably keep using it in read-only mode. But I'm disappointed more Redditers didn't follow through and get out when they had the chance. Truth is, even for the more highbrow set (not going to say necessarily informed, obviously) convenience wins. Because of course it does! And I'll bet many of them are closet Apple admirers too, despite outward and very vocal claims to the contrary ...
To be fair, I haven't used Netflix for years… and while I do visit Reddit occasionally, never had an account there and never post. It is crazy that Digg made a bunch of consumer hostile changes and Reddit was literally born from the diaspora fleeing Digg. Guess Reddit users aren't as bold as Digg users.
