0:05

When I called up Priya Anand to talk

0:07

about Reddit, I wanted to start

0:09

with the company's users. Priya

0:11

is a tech reporter at Bloomberg, and she's

0:13

covered Reddit as it got ready to go

0:15

public on Thursday. What

0:17

I wanted to know is what makes

0:19

a Redditor a Redditor? Who

0:22

is this person? What characteristics

0:24

do they possess? What behaviors

0:26

do they engage in? Can

0:29

you think of the ideal

0:31

Reddit user? Honestly,

0:33

at this point, it's probably anyone. On

0:37

their phone, on the Reddit app, Reddit

0:39

has so many niche communities and broad

0:41

communities. People post pictures

0:43

of their pets. People ask for

0:45

relationship advice. People ask, I

0:47

don't know if you can have this

0:49

in your podcast, but am I the asshole?

0:51

They tell these stories. Yeah, we

0:53

can say that here. The site

0:56

is somehow still in the top 10

0:58

in the US. So really, a

1:00

Reddit user could truly be any among us. A

1:03

lot of people these days I've heard are adding

1:05

Reddit to their Google searches to try to get

1:08

responses that are like, buy

1:10

a personal human, let me find someone's

1:12

experience with this thing on the internet

1:15

that I have a question about. I

1:22

myself have been drawn to a

1:24

subreddit called Daniel Tiger Conspiracy, where

1:27

parents of young children complain about

1:29

kids TV. The

1:31

thing about Reddit, and the thing that,

1:33

in my opinion, sets it apart from

1:35

other platforms, is how its users feel.

1:39

Like it or not, they are passionate about

1:41

Reddit. My biggest takeaway in covering

1:43

company over the last couple of years

1:45

is that is absolutely a love-hate relationship.

1:48

Anytime the company makes a decision that

1:51

even a subset of people on Reddit don't like, there

1:54

are vocal complaints about it. There

1:57

will be protests, there will be blackouts.

2:00

He went on a sub reddit Wall Street

2:02

Bats which you likely remember from it's role

2:04

in boosting game stop and. Other meme

2:06

stocks posters are totally sure at it's

2:08

I P. O is a good

2:10

idea, but tag of anything above

2:12

three bad for more than fifteen

2:15

point one million people. And next

2:17

on they described themselves as at

2:19

the Eyes as he put one

2:21

million degenerate. So he that

2:23

people love to hear people

2:25

use a heated. Desert

2:28

their said. They're

2:32

still there. and now that Reddit

2:34

is a public company, some of

2:36

them have shareholders. Today

2:42

on the show The Fancy to

2:44

the. Internet grows up? maybe?

2:48

I'm with ya Leary and you're listening

2:50

to what Next Tbd a show about

2:52

technology, power and how the future will

2:54

be determined. Stick around. Reddit.

3:09

Has been around for almost twenty years now.

3:12

A. Long time for a social platform

3:14

for discussion, forum or whatever exactly

3:16

read it is. And for most

3:18

of that time it's fair to

3:20

say that read: It's been a

3:22

bit of a wild West, a

3:25

place where devoted users have a

3:27

ton of power for good, for

3:29

ill, and for just. Wield.

3:32

Nurses, Sort of same

3:34

as and Reddit law moment. Then

3:36

Greenpeace asked to. You to

3:39

had the public name a well as

3:41

part of a campaign involving like a

3:43

whale hunting awareness and redditors voted and

3:46

use their power to basically get the

3:48

whale named mister, splashy pads and cinematic

3:50

all these other more. It's more serious

3:53

Sam. emery community really and or

3:55

if we're in a rather rude up behind

3:57

the space for swimming pool and spoke application

3:59

were getting created. The idea was vote your

4:01

conscience, vote for Mr. Splashypants, and people were

4:04

putting up signs in the real world about

4:06

this whale. And this is the

4:08

final vote. When it all was cleared, 78% of the

4:10

votes, and give you an idea of the landslide, the

4:13

next highest name pulled in three. Okay? So... And

4:15

that just shows, you know, the whole meme stock thing

4:17

was like 15 years in the making at this point,

4:19

right? In a way, it's like a

4:22

part of the internet that just hasn't really

4:24

changed that much over the years. Like, you

4:26

look at it, and it's almost like how Craigslist

4:28

you look at it, and it's like, what year

4:30

am I in? You'll never know, right? Just

4:32

looking at Craigslist. And Reddit kind of feels

4:34

the same way in some sense. It

4:36

sort of feels like this relic of

4:38

this previous era of the internet that

4:40

has kind of stuck around. And it's

4:42

a place where any question you're

4:45

looking to get answered, like someone else is going

4:47

to have talked about it on Reddit. Why

4:50

do you think Reddit decided to

4:52

go public now? After all, there

4:55

has been talk of an IPO for years. I

4:58

don't think it would have been their first choice to go

5:00

right now, given that they filed

5:02

confidentially two years ago. And then the

5:04

markets took a turn

5:06

and it was like, okay, what

5:08

now? And investors in

5:10

the public markets clearly became much more focused

5:13

on profitability. And you see now when Reddit

5:15

put out its numbers that they started focusing

5:17

the company on that more over time. And

5:19

so I don't think 2024 right

5:22

now was necessarily what they had in

5:24

mind when they filed confidentially. It's very

5:26

unusual to have that long of a

5:28

gap. And that was actually

5:30

the same year that Reddit was in the

5:32

news all the time because of all the

5:35

meme stocks that were going crazy. Thanks

5:38

to Wall Street bets and people betting

5:40

and really lifting up the stocks of

5:43

companies like GameStop, for example. Tonight

5:45

it's Wall Street's David versus Goliath,

5:48

the struggling video game retailer GameStop,

5:50

suddenly one of the hottest stocks,

5:52

skyrocketing about 8,000% over six months,

5:54

driven by the whims

5:57

of a group of armchair investors on the market.

6:00

This has become a game. It

6:02

started as an idea

6:05

that they were going to demonstrate that

6:07

they had more power than Wall Street.

6:10

The company was very much in the

6:12

culture and in the moment around the

6:14

time when it did file initially, but

6:16

the markets changed and they took a

6:19

waiting period like many other companies. Reddit

6:21

first filed a confidential draft of its

6:23

proposal to go public with the Securities

6:26

and Exchange Commission in 2021. Back

6:28

then, investors thought the company was worth

6:30

some $10 billion. Three

6:33

years later, that valuation dropped to about $6.5

6:35

billion with shares priced

6:37

at $34 apiece. On

6:40

Thursday, Reddit CEO Steve Huffman told

6:42

CNBC that offering Reddit users and

6:44

moderators a chance to buy shares

6:47

was part of the company's ethos,

6:50

a risk but one he felt was worth

6:52

taking. It's a free market. I hope

6:55

they believe in Reddit and support Reddit. But

6:59

the goal is just to get them in

7:01

the deal, just like any professional

7:03

investor would. In Thursday's

7:05

trading, investors were clearly eager

7:07

to get their hands on Reddit stock. Shares

7:10

ended the day trading almost 48% higher at $50.31. This

7:16

company is seen as valuable for a number

7:18

of reasons. One being Reddit

7:21

is actually roughly 20 years old. It

7:23

was acquired by a company that owns

7:25

Conde Nast a year after it was

7:28

founded, spun back out again. Its user

7:31

base has grown over time. It has this

7:33

huge staying power in terms of being one

7:35

of the top 10 sites in

7:38

the U.S. and a very

7:40

loyal and fierce user base. I

7:43

mean, part of their model relies on moderators

7:46

who comb

7:48

through forums and set the rules

7:50

for their forums and decide

7:53

what's going to fly, what's not going to fly.

7:55

One moderator described this to me a few

7:58

days ago as being an internet janitor. And

8:00

so you have these very, very loyal users

8:02

who not only are returning to the platform

8:05

to post there the way you

8:07

might go on any

8:09

other social media platform like X formerly

8:11

known as Twitter, for example, and post

8:14

something. Lots of power users are also

8:16

responsible for sort of maintaining the platform,

8:19

maintaining the communities on there, which is

8:21

several steps. And honestly, several steps further

8:23

than a lot of the other social

8:25

platforms and quite a bit of work

8:27

to be taking on. Yeah, there's that

8:30

loyalty element to there, right? It's like

8:32

these users are not just

8:34

posting content on a regular basis

8:36

like they might at any other

8:38

place, but they're also trying to

8:40

keep the community alive and humming

8:42

and presumably healthy if they're moderating

8:44

and setting the tone for it

8:46

and trying to make sure nobody's

8:48

violating rules or engaging in speech

8:50

that they don't want to accept

8:52

on there. So that's a

8:55

whole new level of loyalty and engagement,

8:57

I think, versus a lot of other

8:59

social platforms. To be worth

9:01

a lot of money to investors,

9:03

to your users, what have you, you

9:05

need to have a plan to make

9:07

money, even though Reddit has never been

9:09

profitable. So I want to talk through

9:12

where the revenue comes from,

9:15

both where it has come from, and then

9:17

the things that the company's been doing to

9:19

sort of branch out and find new revenue

9:21

streams. So tell me through where the money comes from. Yeah,

9:25

so Reddit for years wasn't that focused

9:27

on making money, which is sort of

9:29

amazing to say. I mean, in their

9:32

regulatory filings, they literally say

9:34

that they didn't really start focusing on monetizing

9:36

until 2018. Now, bear in mind, this

9:38

company was founded in 2005. Wow. So

9:41

it's sort of like, wow, what were you doing until then? But

9:45

since then, they've built out

9:47

a substantial advertising department. Reddit

9:49

has also created revenue streams through

9:51

licensing deals with AI companies. Large

9:54

language models need lots of data,

9:57

like Reddit conversations, on which to

9:59

train their algorithm. So it

10:01

makes sense that Reddit would charge the

10:03

companies building those models for access to

10:05

its data. Reddit has

10:08

carved out some deals with some of

10:10

these companies, including Google. They announced a

10:12

deal earlier this year. And in regulatory

10:14

filings, they say these deals will bring

10:17

in a couple hundred million over the

10:19

next few years. Deals they signed this

10:21

year, they expect to bring in about

10:23

66 million. This is pretty small compared

10:25

to their overall revenue. But nonetheless, I

10:28

see this as a growing part of

10:30

their business, the fact that they can

10:32

create these sort of data licensing deals

10:34

and let other companies train their large

10:37

language models with Reddit data. The

10:40

next thing is the company has talked

10:42

a little bit about how it hopes

10:44

to eventually sort of find

10:46

ways to make more money off its

10:48

user base. Like if people are already

10:50

selling each other services within a certain

10:52

subreddit, can Reddit kind of do more

10:54

to facilitate that? And

10:57

maybe make some money there. That's something

10:59

that's mentioned in the company filings, but

11:01

it's still very, very small. And what's

11:03

sort of interesting about that is there

11:05

are plenty of other companies out there

11:07

in social media that have used,

11:10

found ways to monetize their user base

11:12

in these kind of veins, like earlier

11:15

and a little bit more aggressively, right?

11:17

I mean, YouTube, who can

11:19

really watch a YouTube video these days, no matter

11:21

how short it is, without dealing with

11:24

a ton of ads to subscribe and

11:26

get an ad free experience. And

11:29

then last year, Reddit made

11:31

this decision that really is sort

11:33

of part and parcel of the

11:35

AI licensing deal to

11:37

have people pay for its API,

11:39

which made a lot of long

11:42

term Redditors and some outside developers

11:44

angry. It did upset some people.

11:46

There were protests on Reddit once again, but the

11:48

company came back and said, look, we need to

11:50

be paid fairly. And now you see, you see

11:53

why, right? They have these AI content licensing

11:56

deals. But the question remains, I mean,

11:58

the FTC said looking into such

12:01

deals to bring in revenue off

12:03

of user generated content. And the

12:05

company said it doesn't believe it's

12:07

doing anything untoward in any way.

12:09

And so what comes from that

12:11

remains to be seen, I've spoken

12:13

with some users who say, well,

12:15

this is user generated content. Maybe

12:17

there could be a way for users to

12:19

benefit from these deals too, where Reddit's

12:22

going to make money. And once

12:25

again, everything with Reddit comes back to the

12:27

user base. And, and the

12:30

loyalty of the user base. And I

12:32

think it remains an open question how

12:34

users will actually feel as these deals

12:36

become a bigger part of Reddit's business,

12:39

but at the end of the day, you know,

12:41

that love-hate relationship exists. But if you have

12:43

that hate, that means you have strong feelings

12:45

about it, right? And you're a power user.

12:47

They can't quit. Yeah. The hate part of

12:49

the relationship would not exist if you didn't

12:51

have some affinity, right? When

12:58

we come back the journey from

13:00

internet troll to big time CEO.

13:12

I want to talk a little bit

13:14

about Steve Huffman, the CEO. Um, I

13:17

want to talk about his evolution.

13:20

I feel like we could call him a free wheeling

13:23

poster kind of guy,

13:26

at least at one point, uh,

13:29

where would you say he has

13:31

evolved to now? I mean,

13:33

Steve Huffman has said himself that he kind of

13:35

grew up on the internet as a young troll

13:38

and he tried actually earlier in

13:40

his tenure as CEO. He

13:43

was editing comments in

13:45

one subreddit by users

13:47

who were criticizing him and he

13:50

got called out for it and he did apologize. He

13:52

extensively apologized. And that's when he said, you know, he

13:55

kind of grew up as a young troll on the

13:57

internet, you know, he has tried

13:59

to tame the platform. in other ways.

14:01

He did institute this broad hate speech

14:03

policy after Reddit was

14:05

criticized for many years over,

14:08

you know, a lot of people thought

14:10

the company had a laissez-faire approach to

14:12

these things. He's built out a larger

14:14

trust and safety team. LISA DESJARDINS In

14:16

a lot of ways, Huffman is Reddit.

14:19

He co-founded the site, wrote code himself

14:21

and lent it a trollish vibe. But

14:23

he and co-founder Alexis Ohanian left their

14:25

executive positions in 2009 after selling the

14:27

company to Condé Nast. Huffman

14:30

later returned after a particularly turbulent

14:32

few years. Some of

14:34

Reddit's most controversial communities, like

14:36

one focused on creep shots, had been

14:39

exposed. And the site was

14:41

grappling with how to address racism and sexism.

14:43

LISA DESJARDINS When he came back in to run

14:45

the thing in 2015, Reddit had

14:47

already kind of chewed up

14:49

and spit out a couple CEOs in

14:52

the years before that. It was a

14:54

tough job. The users have opinions when

14:56

the company makes decisions, and they're not

14:58

shy about it. They post about it.

15:00

They will make subreddits go dark if

15:02

they feel they don't like the way

15:04

a company, the company is acting about

15:06

a certain policy or with a specific

15:08

stance. There have been

15:10

these open revolts. And so when Steve came back,

15:12

investors were like, all right, he has the moral

15:15

high ground and the kind of the authority to

15:17

say, well, like, look, I made this thing, so

15:19

I know what it should look like. Whereas

15:21

other CEOs, when they tried to tame the platform,

15:24

you know, they couldn't, they weren't necessarily able

15:26

to withstand the backlash as much. But Steve

15:29

in saying like, this is my baby, I

15:31

hand coded the site, I made this exist

15:33

in the world, came in with sort of

15:35

that authority to be able to say like,

15:37

I made this, here's what flies, here's what

15:40

doesn't fly. He can say we never intended

15:42

Reddit to be a place where XYZ. And

15:45

he coded the site, you know, so

15:47

he has the credit to back that up. Yeah.

15:50

He has also grown up with the

15:52

role right from being the guy who

15:54

edited comments on the site, and then

15:56

owned up to it to building the

15:58

company into more. of a business, the

16:01

revenue was $800 million or something

16:03

of that sort last year. He

16:06

built out this advertising department, brought in

16:08

executives to lead it from elsewhere, now

16:11

is leading the company into IPO. He has

16:13

said himself that Reddit needs to grow

16:15

up over time, and it seems like maybe

16:17

he has too a little bit. Well,

16:20

you're getting at something that I think is really

16:22

important and happens in a lot of tech

16:25

companies where you have this kind

16:28

of needle that has

16:30

to be threaded between an enthusiastic

16:33

user base and investors

16:35

that want to see you act like

16:37

a grown-up CEO. And if you

16:39

go too hard in one way, you get

16:42

blowback from your investors, too hard in

16:44

another way, you get blowback from your

16:46

users. But it sounds like from what

16:48

you're saying right now that he is

16:51

managing to stay comfortably in

16:53

the middle. He

16:55

has certainly tried to thread that needle

16:58

and the company has stood its ground

17:00

on changes like the API pricing increased

17:02

the change last year. I

17:04

mean, the fact that they have gotten to IPO after

17:06

20 years at this point does

17:09

speak for itself a bit as

17:11

well. And I think looking at

17:13

Steve Huffman's tenure, he

17:15

has sort of... He's gone toe

17:17

to toe with the users and there have been

17:19

times where he's also stood ground and said, here's

17:21

what's happening. And so how that's

17:23

going to evolve when the company is

17:25

public, what does it look like

17:27

when subreddits push back and there's

17:29

backlash against the company policy when

17:31

you've got a stock that could

17:34

move in response, right? We

17:36

don't know that yet. We'll see what that looks

17:38

like. We'll see what content moderation issues look like.

17:40

In the past, some subreddits

17:42

have protested over things

17:44

like should this other community be banned?

17:46

Is it violating rules? Is it not

17:48

violating rules? Do we think it's promoting

17:50

a safe and healthy Reddit? There's

17:53

been a lot of push and pull between

17:55

the company as users on content moderation as

17:57

well. There have been times when subreddits have

17:59

protested. saying we think you're not taking

18:01

down this thing that is either

18:04

filled with misinformation or hate

18:06

speech or whatever. And so

18:09

what does that push and pull look like

18:11

when the company needs to be responsive to

18:14

public market investors or has public market investors

18:16

who are going to be responsive to issues

18:18

maybe is a better way to put it right. I

18:21

think that will be fascinating to see. One

18:23

thing that has run through everything you have said

18:25

to me is how important

18:28

these users are to Reddit,

18:30

to the spirit of the

18:32

site, but also to its bottom

18:35

line. And to that point, the

18:37

rules are simply different for a

18:39

public company. Literally, the rules are

18:41

different, but also when you have

18:44

investors and billions of dollars

18:46

on the line, there

18:50

can be a whole lot less

18:52

tolerance for questionable

18:54

behavior. Do

18:56

you think that's something that concerns

19:00

users or excites users?

19:03

What does the user base think about all of this?

19:06

Reddit even noted in its risk factors

19:09

for the IPO and for investors that

19:11

the fact that the user base

19:13

can, you know, like maintaining

19:15

a healthy community is something

19:18

that is in the risk factors, right? Users who

19:20

post things that advertisers or

19:22

other people find offensive, users

19:24

could revolt against the company. Like they're

19:27

very well aware that kind of everything

19:29

circles back to the user base. And

19:31

they actually, the company actually reserved a

19:34

portion of its shares for the IPO

19:36

for its users. Steve Huffman has said

19:38

that he wants users to be shareholders,

19:40

that users created this community and they

19:42

should be able to have some ownership

19:45

over it as well. The company has

19:47

joked that users can join and become

19:49

one of their corporate overlords. I think

19:51

it'll be interesting to see how the

19:54

user base responds to having

19:56

the power they have had over this company while

19:58

it was private when it ended. is public.

20:01

Yeah, what if Wall Street Bets is like, yeah, we're

20:03

going to go dark for a few days because we're

20:05

mad. I mean, suburbs have

20:07

gone dark in the past when they've been mad

20:09

about different issues, right? And

20:12

how Wall Street Bets is going to respond to

20:14

the IPO, I think, will also be fun

20:18

to watch, for lack of a

20:20

better word, just because, once

20:22

again, the love-hate relationship

20:24

with the company and the fact that

20:26

power users are able to buy into

20:29

the IPO alongside institutional investors. And

20:31

so as much as there

20:33

are some vocal folks, I've published a

20:36

story about how some folks

20:38

on Wall Street Bets feel sort of negatively

20:41

toward Reddit, the company, and its IPO. But

20:43

at the end of the day, you don't

20:45

know what actually is going to happen, right,

20:48

until things happen. I mean, are

20:50

people posting right now, but they actually feel

20:52

a different way? Are people posting how they

20:54

really feel? Is this a vocal minority that's

20:57

posting about how they feel? Is it representative

20:59

of the broader group? We're not really going

21:01

to know until this all plays out. If

21:04

you wanted to, you could

21:06

see Reddit, separate and apart

21:08

from the other social media networks, if we

21:10

want to call it a social media network

21:13

or front page of the internet, whatever, as

21:16

one of the last

21:18

standing pillars of

21:20

a quote-unquote free internet, an internet

21:23

of a certain era, right? Like

21:25

Tumblr doesn't exist in the way

21:27

that it did. Does

21:30

that disappear as

21:32

a public company? You

21:34

know, is it a sort of swan song

21:37

for a particular time online? I

21:40

think that remains to be seen, right?

21:42

How Reddit will change and if the

21:44

community will change as a

21:46

result of decisions that a public

21:49

company might be making. And

21:52

I also think the AI deals are

21:54

kind of part of the story, right?

21:58

The company needing to make. money

22:01

as a public company at some

22:03

point, focusing more on profitability, trying

22:05

to find ways to sort of

22:07

monetize the user base, trying

22:10

to find ways to sell

22:12

user-generated data. How will

22:14

the community feel about the

22:17

fact that all that is happening, that

22:19

their data is being used in certain

22:21

ways? How will

22:23

they feel about these efforts to find

22:26

more money-making opportunities within the platform?

22:28

I mean, Reddit has been able

22:30

to build up its advertising business

22:33

overall these years while maintaining a

22:35

pretty loyal user base that has

22:37

gotten it to this point and

22:39

that has had influence over the

22:41

markets and our culture. So

22:43

I think that's really the open question.

22:46

What does this mean for the next era

22:49

of Reddit? What does this mean for the

22:51

next era of the internet? And

22:53

the magic that Reddit has for its users

22:55

now, does that start to

22:58

shift as the company

23:00

matures? Priya

23:07

Anand, thank you so much for coming on the

23:09

show. Thank you for having me. Priya

23:13

Anand is a tech reporter for Bloomberg.

23:16

And that is it for our show today. What Next?

23:19

CBD is produced by Evan Campbell, Anna Phillips, and

23:21

Patrick Ford. Our show is edited

23:23

by Mia Armstrong Lopez. This

23:26

is Mia's last show with us and

23:28

we will miss her smarts, empathy, and

23:30

sharp eye for untold stories. Alicia

23:33

Montgomery is Vice President of Audio for Slate

23:35

and TBD is part of the larger What

23:38

Next family. And if you are a fan

23:40

of the show, I have a

23:42

request for you. Join Slate

23:44

Plus. Just head on over

23:46

to slate.com/What Next Plus to sign

23:48

up. Alright, we'll be back

23:51

on Sunday with another episode. I'm Lizzie

23:53

O'Leary. Thanks for listening. you