Reddit users have been reacting with deep gloom to the firm saying it plans to sell shares to the public. The ‘beginning of the end’, ‘good while it lasted’, and ‘they ruined it’, are just some of the comments made by Redditors, as they are known, since the announcement on Thursday.
The company has said its plans are ‘exciting’ and will offer the business opportunities for growth. However, many users worry the move will fundamentally change the website.
Reddit, which was founded almost twenty years ago, is an online forum where users can post questions and comment on topics that interest them. More than 76 million people, on average, visited every day in December 2023, drawn by features like its recurring ‘ask me anything’ threads, in which participants ranging from anonymous ordinary people to former US president Barack Obama field questions.
Some feel the initial public offering (IPO) which has been filed with US regulators will change the site’s spirit. ‘When the most important customers shift from [users] to shareholders, the product always [suffers]’, said one person. ‘It becomes ‘what can we do this quarter to squeak out an additional point of revenue’, instead of ‘how can we make this product better’.
It is far from the first time Reddit’s most vocal users have expressed displeasure at the platform. In 2023, thousands of Reddit communities became inaccessible in protest at how the site was being run – in particular controversial charges for developers of third-party apps, which are used to browse the platform.
Some of the biggest Reddit communities then began only allowing photos and videos of comedian John Oliver, following votes from disgruntled users. But this proved to be short-lived, and Reddit’s plan ultimately proved financially beneficial, as it has struck a deal with Google reportedly worth $60m (£47m) so the tech giant can use Reddit posts to train artificial intelligence tools.
The filing does not say how much money the firm is hoping to raise by listing on the New York Stock Exchange. But it provides a glimpse of the firm’s operations, including its struggles to turn its online popularity into profit. It was valued at about $10bn in a private fundraising round in 2021. But the company has recorded losses every year since its start, including more than $90m last year. In the filing, Reddit said it had not started trying to make money seriously until 2018. It reported $804m in revenue last year, up more than 20% from 2022. Advertising accounted for nearly all of the revenue, but in a note to prospective investors chief executive Steve Huffman said he was excited about opportunities to make the platform a venue for commerce and license its content to AI companies. ‘I have never been more excited about Reddit’s future than I am right now,’ Mr. Huffman said.
