This article seems to leave out the reality that Reddit's big win is data and an in built machine learning capability in what is good quality. For future AI and LLMs it's actually a treasure trove of information that will only rise in value.
Realistically it's had massively bad PR and issues but people still use it over Lemmy and many others, and Lemmy/others aren't going to overcome it any time soon (if ever). So it doesn't seem like it's going to go away at end of day, and it's still one of the best sources of information on the internet available.
At end of day it's stocks so it's coin flips all the way. No one beats the market consistently over time that doesn't also utilise insider information.
“[moderators] may be able to leverage their influence within those communities to change the dynamics of the discourse within the communities or to disrupt the normal operation of their communities or other communities on our platform.”
And they can give you rando-bans out of nowhere, suddenly cutting you off from your topic of interest and exposing serious flaws with the entire site.
Mods could be paid on a bounty system with salary or clocked hourly higher-tier mods to oversee moderation to prevent scamming. The higher tier mods would be paid more based on traffic with that ad profit sharing model.
Or maintain a flat general rate across the board for all mods ... make it a liveable wage so that it is worth it to everyone.
This way, moderating can't be monetized or gamed to drive nonsense content just to drive up the income of a small group of people. If you award moderation with even more money .... then the whole system eventually becomes generating whatever content, bots and artificial popularity just to make money ... rather than in just maintaining an equal well paid workforce that all work to maintain the service as it is and let the users develop the content based on actual interests and popularity.
But what do I know .... the world is just set up to make money and no amount of common sense will ever be implemented if the whole system is perpetually set up to just award those that can make as much money as possible no matter what.
The bounty mods that are incentivized to act are kept in-check by the salary mods who have a base pay determined by number of bounty mods(which is determined by user metrics) with volume bonuses. The salary mods primary responsibility is oversight and only have incentive to increase traffic, which can be kept in-check by bot limits per active users so the mods can't botfarm base pay or bonuses via traffic metrics.
Bounty mods would be established community members supplementing income, salary mods would be would be established members of the community who had a solid track record as a bounty mod.
Just having low-level mods paid a living wage creates waste or overwork as they either get paid to do almost nothing or have to have multiple subs they maintain, which means less focus. If they have a certain number of subs that they have to maintain, they may not have the interest or knowledge of their subs to effectively mod them.
Higher-tier mods would have the same issues but at a higher pay scale, workload, and cost. Not having a higher-tier mod would mean no oversight for the actions of mods except outside of the sub community with people who don't have an active involvement and understanding of that sub community.
That leaves the actual company to act as oversight and investigate suspicious activity within a sub's numbers which indicates some malfeasance. If the numbers aren't genuine, then that harms the profitability of the company because they are paying more for a salary mod and bounty mod than they rightfully deserve.
What you don't know is how a sustainable and effective business or people work. You can't expect everybody to be honest and hard working withithout adequate compensation driving that and you need limits to keep bad actors in-check or flagged for removal. You can't pay people to do less than the value their labor creates and you cant pay people more than the value they creates, that is inviable due to turnover and unsustainability respectively. An unsustainable business leaves the company to derrive sustainable income via alternative revenue outside of their core business like selling user data and rampant ads, which is harmful to the users(See: Reddit).
It baffles me they didn't take the obvious approach of offering apps/API access for Premium users, only turning it into a billable thing for LLMs. They're not going to pay for the API, they will scrape the site. Your users will! That's a great source of revenue that can last as long as reddit does.
Just imagine having a website that makes no money, and you get paid so much to run it that if you got a 90% pay cut and quit after a year you’d still be set for life.
Basically entities flush with wealth do not make their decisions out of a sense of economic survival.
Capitalism is all about brutal survival for the lower classes and for the upstarts without any background.
At the same time capitalism is all about a decision making process that is leisurely, capricious, and forgiving for the aristocratic upper classes.
If the company is sufficiently large (don't know if reddit qualifies, but my past employers have, so speaking from experience here), their own upper management is robbing the company on the inside every day when they make deals with contractors by taking kickbacks as opposed to what benefits the company. Make no mistake, all the upper management that is sufficiently aristocratic are looking out for their personal interests instead of the company's. In other words the same mentality of personal gain at all costs that supposedly drives the creation of some of the companies is also their undoing. "Greed is good" capitalism eats itself. Large ultra consolidated/merged corps are every bit as bureaucratic and internally Machiavellian as any government can hope to be. Their very existence is a tax we all pay and we don't get a vote about how these corporate fiefdoms run both themselves and us.
Reddit at this point is a very important and well backed propaganda tool, the backers can afford to pay their CEO and there is no hurry to make profits, and they have plenty of time and resources for every manner of business mistake.
The refusal to seriously explore cross API marketing is absolutely nuts to me. That's reddit's billion dollar innovation and it was right there. Everything was in place, and it would have legitimately set reddit apart from every other shitty social media marketing paradigm, and would have been an actual game changing innovation.
All they needed was to put some actual engineering effort into it. Which I guess explains why they didn't even fucking try.
Revert to the source code of about 10 years ago and get rid of most programmers. The only positive change in the last 10 years is the ability of users to ban people from harassing you.
Allow all subs to identify other subs they are similar too, and link all that information together so that users who don't like how sub is moderated can find an official list of alternative subs.
Allow only temporary bans, not permanent bans from mods. Admins can still give permanent bans for bad faith or dishonest actors and should do so for foreign governments trying to influence other countries.
Allow subs to optionally require flair identifying citizenships and if you are found to be dishonest you can get site ban.
Get rid of certain pieces of automod functionality that subtract value for the users of the site.
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.
Yeah, they are getting that Google bump. Honestly I'd have bought a bit of IPO stock if it didn't require giving reddit my real info. I'm not that desperate though.
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
$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.
It's a sham, imo. I was on reddit for 15 years. It has peaked already. They won't be able to get more for ads and I don't believe their data for AI will go higher than what they've gotten for it this year. The only way they'll be worth more is to cut overhead.
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.
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
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.
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.
The scale is immensely and massively different. Modern social media is not going away, the digg phenomena was one driven by a much smaller number of more passionate users.
That much smaller number of more passionate users has already left Reddit.
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.
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.
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.
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.
Great piece of marketing to have someone write the article, have people talk about it mistakenly as an actual Forbes article and drive interest in the stock that will make many clueless individuals suddenly have an interest in Reddit Stock.
News is news .... any news whether good or bad, especially if it is controversial and agitates people, is good news for the company pushing their name.
Chances are .... it was Reddit company marketers that set up this article to be featured on the Forbes website to drive attention to their company and their upcoming IPO.
"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)
