Investors now get to see behind the scenes of newly public Reddit
Investors now get to see behind the scenes of newly public Reddit
On Tuesday, all eyes are on Reddit with the company posting quarterly earnings for the first time since it went public in March. This web forum where users from around the world can catch up on their favorite reality TV gossip, get skin care advice or crowdsource recommendations for new appliances has not been much of a moneymaker in the past.
And how exactly Reddit will turn a meaningful profit is still a wait-and-see situation. So, we’re going to do a little TL;DR — that’s Reddit-speak for “summary” — on who is buying what Reddit is selling and also what exactly is Reddit selling these days.
Mintel consultant BJ Pichman said there’s no limit to the data pit that is Reddit.
“If you’re into camping, there is a subreddit called camping,” Pichman said.
Campers ask questions, give advice and rate gear. It’s a trove of product information, which is why he hopes the platform gets better at targeted ads.
“To date no, they haven’t done a great job of it. To be honest, they have struggled to be profitable,” Pichman said.
That’s why artificial intelligence is a big part of Reddit’s new plan, said Samantha Shorey with the University of Texas at Austin.
“A lot of this information is written in a way that is simple, direct and informative,” Shorey said.
That’s super helpful to AI developers, she said, “who are looking to train models to produce information that is accessible, informative.”
Selling data may be good for revenue. But it’s not so good for data scientists like Stevie Chancellor with the University of Minnesota, who researches mental health.
“Quite frankly, like, we can’t afford to pay what companies paid,” Chancellor said.
Though Reddit still has that old-school feel, the newly public company has bills to pay. It has some 2,000 staff, said, Lehigh University professor Donald Bowen.
“They need to pay for more servers and hard drives than they ever have, because their user base continues to grow and produce new content,” Bowen said.
And now that Reddit is public, we can finally learn more about the company’s ad revenue, growth metrics and data licensing.
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