Reddit is getting bigger.

Reddit’s advertising revenue grew to $315.1 million, while “other” revenue reached $33.2 million on account of “data licensing agreements signed earlier this year.” Both Google and OpenAI have cut deals with Reddit to train their AI models on its posts.

In a letter to shareholders, Reddit CEO Steve Huffman attributed the recent increase in users to the platform’s AI-powered translation feature. Reddit started letting users translate posts into French last year before expanding to Spanish, Portuguese, Italian, and German. Now, Huffman says Reddit plans to expand translation to over 30 countries through 2025.

  • Lvxferre@mander.xyz
    15·
    5 hours ago

    As I often mention in other communities, this smells like value exploitation extraction* from a distance. Value exploitation extraction typically generates a peak of profit in the short term, but it makes losses even harsher in the long run.

    As such I don’t think that Reddit is getting “bigger”. That profit is like someone who lives in a wooden house, dismantling their own home to sell it as lumber; of course they’ll get some quick cash, but it’s still a bad idea.

    In a letter to shareholders, Reddit CEO Steve Huffman attributed the recent increase in users to the platform’s AI-powered translation feature.

    Let’s pretend for a moment that we can totally trust Huffman’s claim here. Even human translations often get some issues, as nuances and whatnots are not translated, and this generates petty fights, specially in a younger userbase like Reddit’s; with AI tendency to hallucinate, that gets way worse. And even if that was not an issue, a lot of content is simply irrelevant for people outside a certain regional demographic.

    *EDIT REASON: I switched the terms, sorry. (C’mon, I’m L3.)

      • Lvxferre@mander.xyz
        4·
        5 hours ago

        Yup, it is 100% relevant! Selling user data is extremely profitable, specially with a large userbase. However, it lowers the value of the platform - it makes users less eager to genuinely contribute with it (due to privacy concerns, seeing it as a “they’re exploiting me!” matter, etc.). As such the data being generated there becomes less useful, less relevant, and less profitable over time, paradoxically enough.

        • OpenStars@discuss.onlineEnglish
          2·
          4 hours ago

          Over time yes, but then again those most likely to leave have already done so. At this point I don’t expect anymore large exoduses from it, but even if there were I’m not so sure that they would come here.

          Conservatives would not feel welcomed in the slightest (nor should they, hey-oh!:-), normies would not feel comfortable due to the heavy need to block every damn thing here just to survive it, and especially the people who think they are leftists (as I once naively thought, with zero evidence I should add!:-P who wants to bother actually looking up definitions of terms? especially if everyone around you is a conservative and thus it makes no functional difference) will find themselves most likely to become dogpiled onto by the people most ah… “eager” to look down upon their fellow human (and some as we so recently and unfortunately discussed go so far as to tell others to kill themselves - highly inappropriate language, especially coming from an instance admin).

          So even if some were to leave, where would they go? Twitter is dead, having been eaten from the inside by X and cancelled, then necro-birthed into its current undead existence. And Facebook… just… no. Threads then? Maybe in a few years but either way it’s not comfortable and familiar like Reddit is. So even if people left Reddit, I would expect them to go crawling right back into it, maybe just change their subs or some such. Especially when they roll out subscription model to avoid (some of) the ads, though it’s too soon still as they get people used to them slowly but surely… just like a frog in a pot being cooked slowly (except that’s a false story, bc irl the frog actually does have enough sense to jump out!).

          Or maybe they’ll simply touch grass, until they can’t stand that anymore?:-) Playing games rather than talking with people can be a real distraction from the grittiness of life - and then there’s Discord servers that so long as you only want a singular specific game, actually do offer a convenient method to discuss such a focused topic.

          So “less profitable”, I guess we’ll see. Probably somewhat less, but substantially so? That I dunno.

          • Lvxferre@mander.xyz
            2·
            3 hours ago

            I’m not expecting a big exodus, but rather a slow decline in both the number of users and their engagement. With a few peaks here and there that seem to revert the downwards trend, but each peak being smaller than the one before.

            They won’t be leaving for the same reason as most people here did, pissed at the IPO-related changes (such as killing 3rd party apps). It’ll be more like “…meh, why would I check Reddit? There’s better stuff elsewhere.” We can already see the decline of the content quality in Reddit now; it’ll get only worse over time.

            I think that most will end in Discord. Some in Bluesky, and some will simply touch grass. Conservatives might end in Minitrue “truth social” or crap like that.

            Facebook might perhaps absorb some of the former Reddit users. It feels disgusting for the privacy conscious, but for them it’ll be a simple matter of not finding interesting stuff in Reddit.

            The same applies to Reddit’s liquid profit - for now, that value extraction still creates a small peak on raw profit, to the point that the bottom line became positive; later on the peak will barely reach the surface; later on, value extraction will be necessary to avoid making the bottom line too negative.

    • S_H_K@lemmy.dbzer0.com
      2·
      6 hours ago

      value exploitation

      I tried searching that term but had no luck any article I could use to know more?

      • Lvxferre@mander.xyz
        3·
        5 hours ago

        I fucked it up and switched the terms, sorry. Look for “value extraction” instead; you’ll find multiple references to the concept such as this or Mazzucato’s “The Value of Everything”.

        To keep it short: you create value when you produce desirable goods/services for the customers; however, when you extract it, you’re picking the value that was already created (by society, your customers, or even your own business) and turning it into profit. The later is faster but unsustainable, as that value doesn’t pop up from nowhere, so when a business shifts from value creation to value extraction it’ll get some quick cash and then go kaboom.

        In Reddit’s case, this value is mostly users willing to generate, curate, and share content with the platform, and other users knowing this:

        • someone recommends you a product/brand. The person might be wrong, but you were reasonably sure that they aren’t a corporation astroturfing their own product. Someone else might criticise it instead.
        • you hop into your favourite subreddit and, while the content there isn’t the best, it’s still good enough - because the mods gave some fucks about growing their subreddits;
        • you discuss some controversial topic. You might get dogpiled, but at least you know that the dogs piling you are human beings, that sometimes might listen to reason; a bot will never;
        • et cetera.

        All that value was being slowly extracted through the last years, but the changes in 2023/2024 did it the hardest.

      • Lvxferre@mander.xyz
        2·
        5 hours ago

        I think that most users there are still human beings, but botting has become a big enough problem that the platform can’t be seen as a place for genuine content any more.