
Ask HN: Why is Reddit worth so little? - kthaker
I was looking at Alexa&#x27;s global site rankings here:<p>http:&#x2F;&#x2F;www.alexa.com&#x2F;topsites<p>Reddit is ranked at number 9 on the list. It&#x27;s ahead of Twitter, LinkedIn, and Twitch, to name a few.<p>Those three companies each make billions in revenue each year. Some lose money, but they still produce quite a bit of subjective value and have valuations that are high to match. I know Twitter might lose value over time, but it&#x27;s going to be in the billions for a while.<p>Reddit has more site visitors, way longer time spent on website, and more pages viewed per user than most of the sites on the list. But its valuation, last I checked, was $500 million - far below its peers. I&#x27;ve also heard that it only makes $10 million a year in revenue.<p>So why is Reddit&#x27;s revenue and valuation so low? It&#x27;s not as if it&#x27;s worthless to advertisers - there&#x27;s a fair amount of preference data to be gleaned from users based on which sites they visit and so on. Is it bad management? Lack of focus? Or something else?
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flukus
AFAIK, reddit didn't take much venture capital so there was no pressure to
make billions to appease investors that put billions in. They've never been
aggressive about monetizing the site.

The network effect of reddit are also much less than twitter or facebook, it's
primarily a news aggregator + comment system, there are plenty of competitors
ready to step in if reddit starts throwing in tracking or invasive
advertising.

> I've also heard that it only makes $10 million a year in revenue.

What's wrong with that? Not everyone wants to be the next google or facebook,
I'd love to have a site that made $10 million a year, I'd be perfectly content
with that and wouldn't have a desire to turn it into a multi billion dollar
empire. ~20 years ago this was the dream of most software developers, carving
out there own ISV niche and getting rich.

Unlike twitter, reddit is a sustainable business. If I had to bet on which one
will still be here in 5-10 years I'd bet on reddit.

~~~
spcelzrd
I love the fact that reddit chooses to stay small and sustainable.

Twitter is taking the opposite path and they do everything in their power to
alienate their most passionate users. However, I think Twitter is
infrastructure now, like Facebook and LinkedIn, and it would be very difficult
to disrupt or displace.

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wayn3
twitter is primarily an app. you dont get alexa ranking for that.

twitch doesnt generate pageviews like reddit would. twitch tracks minutes
watched, and i bet you that users of twitch spend a lot more time on twitch
than redditors spend on reddit.

yes, reddit IS bad for advertisers. reddit are about the most informed people
on the internet. you cant sell on reddit. ask any marketer. reddit advertising
is bottom tier. unless you want to run meme ads that dont generate revenue.
that can be fun, but ads are generally bought to drive revenue. not to appease
the users of the site the ad runs on.

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satsuma
I may be wrong on this, but I'd hedge a bet that a majority of Reddit users
run some sort of ad-blocking software. The "culture" (horribly wrong word but
I can't think of a better one) on Reddit is also very anti-advertisement.
Users are quick to point out even the most innocuous use of branding in posts
as astroturfing. /r/HailCorporate is a perfect example.

~~~
wayn3
That's irrelevant. As an advertiser, you WANT people who don't want to see ads
to run adblock. Because you don't get billed for those impressions from people
who wouldnt have bought anyway.

Adblock is a problem for publishers, not advertisers. Adblock actually helps
align advertisers with consumers.

If you've gone to such great lengths as to installing adblock, you're probably
pretty proficient in "exhibiting anti-marketing behavior".

~~~
dragonwriter
> As an advertiser, you WANT people who don't want to see ads to run adblock.

No, you want people who wouldn't​ act on your ads to run adblock. The degree
that that correlates with "people who don't want to see ads" is far from
clear.

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Mz
Reddit is incredibly scattered. It is hard to know where to post a thing you
find interesting. Historically, there was no general "I find this interesting"
place to post it. If you posted it to the wrong sub Reddit, it wouldn't go
anywhere at all and might get deleted. There was no real means to share stuff
"with friends" just because you liked it. It needed to be on topic for the sub
Reddit in question. Each sub Reddit has different moderators.

This has its good points and bad points. I have been enjoying certain aspect
of it, but this is probably a barrier to certain things as well. Monetization
may be one of those things.

They very recently introduced enhanced profile options for users. This is in
beta testing. This is a means to post something somewhere that you find
interesting and have no clue where it belongs on the site. It also has a means
to give a person more of an identity on the site than what was previously
available. I see it as a significant and positive change that probably won't
undermine some of the positive aspects of having a bunch of different sub
Reddits.

I will suggest you check back in a year or two and see if
valuations/monetization has changed any. I feel like the profile options
currently in beta testing are probably game changing in a good way for the
site.

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cm2012
Try advertising on Reddit. Volume on targeted subreddits is super low. Volume
on the site in general is only good for very niche products.

