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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.
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.
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)
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.
So the reason reddit struggled to develop a decent app is… because of server costs?
Seriously. They still don’t have a way to increase the font size on the default app last I checked. How is such a basic feature STILL lacking?
Im a way, yeah. They clearly they made a shitty app to extract as much value from their users as possible. But my point was that Reddit has significantly higher costs than third party app developers (because they host the content), so the business model that works for third party app developers doesn’t work for them.
Looking at a third party app - made by someone who doesn’t have to bear the costs of running the site and can therefore make decent money on an ad-free experience - and a first party one which does have to recoup those expenses doesn’t really work. The financial models are just fundamentally different.
I don’t say that to defend Reddit. They’re clearly a shitty company headed by shitty people, and I’m sure they could’ve found different ways to make money. But yeah, their financial incentives for making an app are fundamentally different than those of other devs.
No one was saying reddit couldn’t implement API costs. In fact, every major 3rd party app developer, including Apollo, supported Reddit charging for API access and made suggestions on how such an arrangement could be made that was fair and reasonable to all parties. Reddit even invited these developers to discussions on the topic. However, Reddit’s CEO said fuck that and wanted to charge an insane amount of money for API usage that no 3rd party developers would be able to reasonably afford without asking for an exorbitant amount of money from their users.
Here: https://www.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/
That was post made by the Apollo dev after their meeting with the Reddit team. With more info here:
https://www.reddit.com/r/apolloapp/comments/14dkqrw/i_want_to_debunk_reddits_claims_and_talk_about/
This link is really the one that discussed how willing 3rd party devs were to pay for API access if it was a fair cost. Reddit wasn’t interested in being fair.
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.
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?
Telegram has entered the chat
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.
Another difference was I was willing to pay for Apollo, whereas I don’t want to spend a dime on Reddit.
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.
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?
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.
Yeah, too often Forbes will publish any old trash.
But it’s hard to argue with maths.
“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
0.1% of the users isn’t exactly a threat to their model.
Just like Reddit wasn’t a threat to Digg.
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.
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.
But you should also take into consideration that this article did not get a huge attention. It is almost a week old and has a few thousand viewers.
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.
But Google is crap now for searching.
…and they make SOOO much money because of it. Companies are buying into it to push their results higher using SEO words and phrases to help.
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.
site:reddit.com
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.
It’s expensive to research and develop Spez’s apocalypse bunker.
Or as I like to call it: Super Weenie Hut Jr.
Delivering ads to people who are armed up to the teeth with adblockers requires quite some research effort.
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.
Hundreds of millions of dollars each year and in 20 years all they did is two redesigns, both of which sucked worse than what they had originally.
Oof.
Nowadays it’s llm powered bots all the way down.
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.
$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.
Oh just Forbes totally destroying Reddit.
Dude does NOT like reddit. I wonder which app he liked?
Capitalist isn’t human, he has stock in Facebook and Twitter so he doesn’t want Reddit competition
That you, Steve Huffman?
deleted by creator
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.
Future penny stock.
I think it’s worth less than that. But “reddit gold stock” doesn’t roll off the tongue as well.
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.
Extremely well written and put together. Still, as harsh as it is, I think the author was still not harsh enough.
I’ve never shorted a stock before, but this is looking like a solid play.
Looks like it’s finally time to bite the bullet and watch the big short.
If you really haven’t… you need to. Better yet read the book. It should be required reading in America to see how the financial institutions fucked over America in 2008 and most of them got away with it or got the government to pay for it’s mismanagement, while a LOT of people got saddled with absolutely awful loans because all that mattered was creating and selling new debt.
From the article:
Reddit earns an Unattractive Stock Rating.
Of course it does, have you seen the average redditor?
Return Of
It never left, bro.
Is Reddit a crypto?
