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.
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.
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.
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.
Another difference was I was willing to pay for Apollo, whereas I don’t want to spend a dime on Reddit.
2000
Reddit has over 2000 employees.
This is one of those things where, I totally feel for all the big tech employees who’ve been laid off, and it is ultimately the fault of the companies, but like, that’s just too much.
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.
"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)
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.
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.
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.
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.
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.
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
What could have been done to increase the valuation higher and maintain goodwill with the community:
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.
But no, they wanted that LLM money.
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.
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.
Oh just Forbes totally destroying Reddit.
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
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.
I’ve never shorted a stock before, but this is looking like a solid play.
Extremely well written and put together. Still, as harsh as it is, I think the author was still not harsh enough.
Ditch reddit, join lemmy!
Return Of
It never left, bro.
This is a most excellent place for technology news and articles.
