Steve Huffman, CEO, Reddit, comments on ‘Redesigning Reddit’ during the third day of the Web Summit in Altice Arena on November 8, 2017 in Lisbon, Portugal.
Horacio Villalobos | Corbis | Getty Images
Reddit has a moment.
The online community network was put in the spotlight this week after a group of investors on one of its forums – WallStreetBets – inspired a large group of retail investors to buy shares of GameStop, AMC and other heavily short-circuiting companies. Shares soared, causing the brokerage Robinhood to temporarily restrict the purchase of options in certain stocks, although this was again restricted.
The Reddit community describes itself as ‘Like 4chan found a terminal illness in Bloomberg’. This is a distressing description these days. Supporters of Donald Trump have used so-called ‘dark web’ forums like 4chan to describe the details surrounding the Capitol Hill uprising that led to Trump’s indictment and the deaths of five people. Given the events, the idea of young, potentially dissatisfied people using a community to pursue a mob-driven theme may rub people off wrong. As CNN noted: “Posters delight in their crudeness; homophobic captions are tossed around as love.”
To ensure that Reddit communities do not get out of control, Steve Huffman, CEO and co-founder of Reddit, and his team ‘Daily Active S — heads’ watched,’ Huffman said on Thursday at a forum on audio startup Clubhouse said.
Huffman described ‘DAS’s as actors who prevent other Redditors from enjoying their experience. As CEO of a social media company, Huffman has been dealing with balancing free speech censorship, 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 do not show their language or if they act with threats or bullying, they eventually remove it.
Then there are whole groups of people who can be problematic. Huffman said the closing of a forum – also called a subreddit – comes “with a heavy heart.” He described that the subreddit ‘r / The_Donald’, where the participants expressed support for Trump’s rhetoric and policies, had many opportunities to clean up their interaction with others – including Reddit employees. Reddit finally pulled the plug on the group on June 29, 2020, about five years after its founding.
Reddit’s reputation: open communication
Reddit earns its money mainly from advertising. CNBC reports in 2018, Reddit generated approximately $ 100 million in revenue. Reddit also sells Reddit coins, its digital currency to reward specific posts with trophies, indicating their excellence. Reddit also sells an ad-free Reddit Premium product for $ 5.99 per month.
Reddit raised about $ 550 million in funding, which recently raised $ 300 million in a February 2019 Series D series led by China’s Tencent at a valuation of $ 3 billion.
Huffman, Alexis Ohanian (now married to tennis star Serena Williams) and Aaron Swartz, who died in 2013 at 26, started Reddit in 2005 with support from Y! Combinator founder Paul Graham. The original intention of the company 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 users to be anonymous, which can lead to more honest – but also more harsh – communication. The site also gained notoriety for its “AMAs”, or “Ask Me Anythings”, where experts and celebrities would ask questions for users. President Barack Obama did one in 2012.
Ohanian told CNBC this week that he sees the merger of people in Reddit’s “WallStreetBets” as a victory for individuals over financial institutions, which have long dictated investment policies.
“This is an opportunity for Joe and Jane America – the retail buyers – to withdraw and hedge these hedge funds,” Ohanian told CNBC’s Squawk Box. “It’s gotten a lot bigger. It’s very personal for a lot of people. It’s a big moment. These communities are a by – product of the connected internet. Whether it’s some platform, it’s the new normal.”
In 2006, Conde Nast acquired Reddit for $ 10 million. Huffman and Ohanian become millionaires. Huffman held on until 2009, when he left as acting CEO.
Both co-founders eventually returned to Reddit after Conde Nast formed the company, with parent company Advance Communications as the majority shareholder. Huffman returned in 2015 as CEO. Maintaining Reddit’s reputation as a forum for public communication has become particularly important from a brand perspective, as other social media sites, such as Facebook and Twitter, have censored users (including Trump) for inciting violence or spreading hate speech. . .
Although Reddit has not announced plans for disclosure. whether through a special purpose acquisition (SPAC) or initial public offering (IPO) agreement, its popularity this week could lead to an increase in users – and possibly dollars as well.
Still, public investors need to get comfortable with a company that houses communities with enough “Daily Active S heads” that the CEO has a name for it.
WATCH: ‘This is a drastic move’ – Reddit co-founder Alexis Ohanian on WallStreetBets
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