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Reddit Will Go Public This March — Here’s What You Need To Know

  • 7 min read

It’s not profitable yet but belongs to the top 10 social media platforms in 2024 with 430 million monthly users.

My father just called.

“Hey Kris, real quick, guess which platform will go public this quarter?”

Me: “Mhh.. no clue.. maybe..(baby’s crying in the background)… just tell me, I’m sorry”

Dad: “Reddit”

Me: “Oh, wow. Interesting!”

Dad: “That’s the platform you’re writing on, right?”

Me: “Nope, Dad. I’m writing on Medium and Substack” (I sigh and roll my eyes inside)

Dad: “Social media is all the same, isn’t it?”

Here’s the background story: My dad used to be a broker. Now that he’s retired, he loves to keep me updated on all (tech) listings worldwide and he still doesn’t understand what exactly I’m doing part-time.

Okay, this was supposed to be a nice introduction to an even nicer public offering.

I googled it and Reuters reported Reddit plans to go public at the end of March.

Apparently, it’s one of the most anticipated tech listings of the year (besides semiconductor firm Astera Labs, cloud storage startup Rubrik, and ticketing firm SeatGeek.).

So I guess it’s something you’ll come across sooner or later so here’s a quick overview and some thought-provoking questions.

Reddit describes itself as “the front page of the internet.”

Reddit “has become known as the dominant digital watercooler, and replaced forums and chatrooms of yore to be the go-to place for connecting with like-minded communities and getting your questions answered.”

The social media company is 19 years old and has been controversially discussed ever since. Some love it. Some hate it.

However, Reddit’s user base is expanding like crazy.

Guess how many monthly active users (=MAU) they have?

Reddit has over 430 million monthly active users and belongs to the top 10 social media platforms in 2024.

photo credit: Search Engine Journal

This shows Reddit belongs to the biggest online players!

Plus, it has more than 2.8 million communities or subreddits (similar to Facebook groups).

However, as The Information in their newsletter reported “the company grew revenue by more than 20% to slightly over $800 million” but wasn’t profitable.

As a marketing manager myself, I know it’s not easy to understand what being profitable means.

Here’s a short explanation:

Google profitable

A firm is considered profitable if it produces a profit as opposed to a loss.

Put otherwise, the enterprise attains a monetary benefit.

Reddit never turned a profit and has been losing money for many years.

As someone in a subreddit puts it:

“This is why the IPO is ludicrous. A company that doesn’t make money wants investors. Like somehow value is based on thoughts and prayers.”

By the end of February Reddit will make its IPO (initial public offering) filing public.

This means the company is giving investors a look at Reddit’s business growth.

Here are the three main reasons why Reddit hasn’t become profitable yet:

1 — As with almost every social media platform, Reddit has also been investing heavily in its growth and new products and features.

That has been expensive but led to a larger user base though.

2 — The growth of Reddit’s advertising revenue has been gradual.

Young adults make up the majority of the company’s user base, and they use ad-blockers and are less inclined to click on advertisements.

3 — Reddit hasn’t sold user data yet or introduced paid content, as other platforms.

In my opinion, Reddit has the potential to be a seriously profitable platform

Here’s why:

Increasing Ad Revenue

Reddit is actively working on enhancing its ad revenue.

This involves using machine learning to understand users’ interests better, allowing them to display more relevant ads.

Additionally, they’re testing new ad formats.

Expanding Subscription Services

Reddit Premium

Reddit is expanding its subscription offerings, particularly for Reddit premium subscribers ($5.99 p.m).

They’re exploring the possibility of launching exclusive subscriptions that grant access to unique content and communities.

The company sees subscriptions as a significant potential revenue stream and is investing accordingly.

Monetizing User Data

As with any social media company, Reddit holds valuable user data, including interests, demographics, and browsing habits.

They could monetize this data by selling it to advertisers and businesses.

Introduction of Paid Content

Reddit is considering the introduction of paid content, such as premium articles and features.

Is it a platform for writers and creators?

screenshot account WalkingDad ^^ Patrick

I searched for “Reddit” on Medium and found Scott Stockdale’s article Reddit’s Had a Facelift — And It’s Now a Goldmine for Writers.

In it, he shares that he’s interacting in subreddits to grow his email list, connect with others and grow his freelancing business.

Here’s his method:

Reddit Method

Join 2–5 Subreddit communities about writing. You’re looking for Subreddits with at least 2+ daily posts, over 5K members, and lots of engagement.

When someone posts a question you can answer, give a detailed response. The more detail, the better. I aim to post three detailed responses a day.

Spruce up your profile. When people check you out, you want to point them to your website or preferred social platform.

I asked my husband who used to be very active on Reddit in the software developer and gaming scene.

He couldn’t believe that this self-promotion method worked because he had been banned from multiple subreddits in the past whenever he started talking about “his business”.

What’s brilliant is that you’ll find at least one subreddit actively discussing your industry. e.g. writing online.

But take note: Reddit is a place where sincerity and real communication are highly valued.

The community hates self-promotion, therefore you have to be careful if you want to self-promote your articles or business.

Just dig a bit deeper into a subreddit and you’ll see that the users won’t hold back when criticizing and calling out anything they believe to be false.

So I’m not sure whether it’s a tool for self-promotion.

Is it smart to invest once it’s public?

Dunno.

I don’t think my dad has an answer to that either, because he talks a lot about all these tech giants, but rarely buys them. haha.

Oh and within the last 24 hours, this question was posted on AskReddit:

screenshot Subreddit AskReddit

What do you think about Reddit going public in March? Is Reddit a platform you use?

A — No clue.

B — I also wonder if it’s “going down the shitter”.

C — I don’t use it (anymore).

D — I would invest in Reddit.

E — I wouldn’t invest in this platform.

F — I’m thinking about using it as a self-promotion tool and answering questions there.

G — …

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