Reddit starts making money, after twenty years. Born in 2005, almost by chance from the intuition of two university students (Steve Huffman and Alexis Ohanian), the social news, discussion and entertainment platform has experienced decades of growing losses and budgets in the red. Then the stock market listing last March and now profitability: in the third quarter of the year 29.9 million dollars in profit, 348.4 million dollars in revenues (+68% compared to 2023) and more than 97 million daily users (+47% on the previous year).
Reddit was born almost twenty years ago as a university experiment. Huffman and Ohanian imagined a site that collected and organized user-voted content, turning Reddit into a sort of “front page of the Internet.” It is a social media platform and online forum, organized as a large forum-based discussion community, where users can share content, ask questions, discuss and vote on posts and comments. It is organized into moderated sections/forums called “subreddits”, each dedicated to a specific topic: technology, politics, curiosities, various hobbies, etc. Users publish posts (text, links, images or videos), which can then be commented on by other registered members. Top-rated posts and comments appear higher in the feed, increasing their visibility. You can find everything here: questions, tips, memes, videos, news and discussions. Some subreddits are dedicated to sharing links and resources, others are more interactive and focus on discussions and exchanging opinions.
From 2005 to today, the social network has accumulated significant losses, always remaining far from positive balance sheets. The March 2024 IPO was a turning point: The stock’s initial price was set at $34, but it has since tripled, closing last week at $116.05. In the third quarter of 2024, growth was 68% in annual revenue, reaching $348.4 million. Part of this revenue comes from the advertising sector, which generated $315.1 million. But artificial intelligence also played a great role in the “awakening”. Several technology giants (Google and OpenAI) have partnered with Reddit to use its content to train AI models. This earned the social network approximately $33.2 million.
Another key to success was the increase in active users, which reached an average of 97.2 million daily, up 47% compared to 2023. The integration of automatic translation into several languages, including French, Italian and German, has expanded the platform’s reach, attracting new international users in countries such as India and the Philippines. By 2025, Reddit plans to expand this feature to over 30 markets, increasing accessibility for an increasingly global community. And revenue projections for fourth quarter 2024 are between $385 million and $500 million. After twenty years the university experiment is making it.
