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this post was submitted on 28 Mar 2025
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IMO, anybody who invested is a fool. AFAIK the only user-generated content companies that have made the model work are Google (YouTube) and Meta, and that's because they're the advertising duopoly that controls the Internet. Maybe TikTok, but that one's a mess. Twitter couldn't do it, even before Elon they were a big money loser.
So, what does Reddit have that other companies don't? Nothing really. And now that they did their IPO their investors are going to start demanding growth, which means enshittification. But, unlike YouTube where there's no viable competitor, or Facebook / Instagram where there are network effects locking people in. Reddit users are mostly pseudonymous. IMO that also means much more likely to jump to another platform like Lemmy.
I think Twitter did finally make some profit before Muskrat takeover, I remember reading a headline that it was finally profitable after 10 years or something
I seem to remember that they were just barely making it on one measure, and failing heavily on another. Like, they were just barely cash flow positive, but had massive debts and weren't turning a profit. Or they were turning a profit on paper but their cash flow was massively negative.
They're always measures that can be gamed. Like, you can be cash flow positive if you sell a bunch of debt for cash. You're temporarily cash flow positive but definitely not profitable. Or, you can sell a bunch of widgets and mark down the revenue, but since you're still waiting to get paid your cash flow is negative. That can be deceptive if you know a high percentage of sales are going to be returned.
Their IPO was priced below $100, thus far the model still works. I'm guessing they'll go the way of facebook, with dwindling user engagement but somewhat stable ad revenue since people go there out of habit or through links from random google searches for obscure topics.
But Facebook has network effects that basically lock people in. If they leave they leave their friends and family behind. It causes a collective action problem. If you leave, your friends and family stay behind. You want some way to move everybody all at once, and that's really hard.
But, because Reddit is based on pseudonyms, people don't tend to form attachments the same way, at least IMO. That means you feel less locked in. As long as you can find people talking about those same subjects elsewhere, you aren't as locked in.
In addition, Meta is part of the online ad duopoly along with Google. They're really good at monetizing their users. Reddit is just a smallish website and can't compete with that.
For now, random google searches take people there. But, that's based on the idea Reddit isn't going to lock results behind a paywall / registration wall, or Google isn't just going to slurp up the results and present them so someone never has to click on the Reddit link.
They're not below the IPO price yet, but they certainly aren't growing all that fast. They spent most of the time since the IPO barely moving, then they had a 3 month growth in their stock price, followed by a huge dip. The investors want growth, and growth requires enshittification, and enshittification will make people leave.
Very good point, I didn't really consider that. And now I feel bad for not replying more to your elaborate response, but there's simply nothing else I could add.
Speaking of YouTube...I got banned yesterday for telling a troll he yapped like Pootang the Tiny's performing poodles. Apparently that was harassment and cyberbullying....
Not that I agree with the ban but feeding trolls is a terrible pastime.