Steve Huffman CEO, Reddit, comments on ‘Redesigning Reddit’ during the third day of the Web Summit at Altice Arena on November 8, 2017 in Lisbon, Portugal.
Horacio Villalobos | Corbis | Getty Images
Reddit is having a moment.
The online community network came to the fore this week after a group of investors in one of its forums – WallStreetBets – inspired a large group of retail investors to buy shares in GameStop, AMC and other heavily sold companies. Stocks skyrocketed, causing business broker Robinhood to temporarily restrict the purchase of options for certain shares, although it reopened in limited capacity.
The Reddit community describes itself as “How 4chan discovered a terminal Bloomberg disease.” This is a precarious description these days. Donald Trump’s supporters used so-called “dark web” forums like 4chan to trace the details surrounding the Capitol insurgency that led to Trump’s impeachment and the deaths of five people. In view of these events, the idea of potentially disaffected young people using a community to promote a mob-driven theme can hurt people. As CNN noted, “posters delight in their rawness; homophobic epithets are used as terms of affection.”
To ensure that Reddit communities don’t get out of hand, Reddit CEO and co-founder Steve Huffman and his team monitor “Daily Active S — heads”, Huffman said in a forum at the audio startup Clubhouse on Thursday market.
Huffman described “DAS’s” as actors who prevent other Redditors from enjoying their experience. As CEO of a social media company, Huffman had to deal with the balance between censorship and freedom of expression, similar to Jack Dorsey of Twitter and Mark Zuckerberg of Facebook. When it comes to these users, Reddit gives them a lot of warnings, but if they don’t moderate their language or engage in threats or bullying, Reddit eventually removes them.
So, there are entire groups of people that can be problematic. Huffman said that closing a forum – also called a subreddit – comes “with a heavy heart”. He described giving the subreddit “r / The_Donald”, where participants expressed support for Trump’s rhetoric and policies, plenty of chances to clean up their interactions with others – including Reddit employees. Reddit ended up leaving the group on June 29, 2020, about five years after its formation.
Reddit reputation: open communication
Reddit makes money mainly from advertising. CNBC reported in 2018 that Reddit generated about $ 100 million in revenue. Reddit also sells Reddit coins, its digital currency to reward specific posts with trophies, marking its excellence. Reddit also sells an ad-free Reddit Premium product for $ 5.99 / month.
Reddit raised about $ 550 million in funding, most recently raising $ 300 million in a February 2019 Series D round led by Chinese Tencent in a $ 3 billion valuation.
Huffman, Alexis Ohanian (now married to tennis star Serena Williams) and Aaron Swartz, who passed away at the age of 26 in 2013, started Reddit in 2005 with the support of Y! Paul Graham, founder of Combinator. The company’s original intention was to function as the front page of the Internet.
Since then, Reddit has become synonymous with its free exchange of ideas and niche communities around video games, sports, politics and finance. Reddit allows its users to be anonymous, which can lead to more honest – but also more coarse, communication. The site was also famous for its “AMAs”, or “Ask Me Anythings”, in which experts and celebrities asked users questions. President Barack Obama did one in 2012.
Ohanian told CNBC this week that he sees the union of people on Reddit’s “WallStreetBets” as a victory for individuals over financial institutions, which have long dictated investment policy.
“It’s a chance for Joe and Jane America – retail stock buyers – to relax and back off on these hedge funds,” Ohanian told CNBC’s Squawk Box. “It has become something much bigger. It is very personal for many people. This is a seminal moment. These communities are a by-product of the connected Internet. Whether one platform or another, this is the new normal.”
In 2006, Conde Nast acquired Reddit for $ 10 million. Huffman and Ohanian become millionaires. Huffman remained until 2009, when he stepped down as interim CEO.
Both co-founders returned to Reddit after Conde Nast split the company, with parent company Advance Communications remaining the majority shareholder. Huffman returned as CEO in 2015. Maintaining Reddit’s reputation as an open communication forum has become particularly important from a brand perspective, as other social media sites, such as Facebook and Twitter, censored users (including Trump) for instigating violence or proliferate hate speech.
Although Reddit has not announced plans to go public. whether through an agreement with a special purpose acquisition company (SPAC) or initial public offering (IPO), its popularity starting this week could lead to an increase in the number of users – and possibly in advertising dollars.
Still, public investors would have to feel comfortable with a company that houses communities with enough “Daily Active S — heads” for the CEO to have a name for them.
WATCH: ‘This is a drastic change’ – Reddit co-founder Alexis Ohanian on WallStreetBets
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