Reddit’s advertising revenue grew to $315.1 million, while “other” revenue reached $33.2 million on account of “data licensing agreements signed earlier this year.” Both Google and OpenAI have cut deals with Reddit to train their AI models on its posts.

In a letter to shareholders, Reddit CEO Steve Huffman attributed the recent increase in users to the platform’s AI-powered translation feature. Reddit started letting users translate posts into French last year before expanding to Spanish, Portuguese, Italian, and German. Now, Huffman says Reddit plans to expand translation to over 30 countries through 2025.

  • Lvxferre@mander.xyz
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    23 days ago

    As I often mention in other communities, this smells like value exploitation extraction* from a distance. Value exploitation extraction typically generates a peak of profit in the short term, but it makes losses even harsher in the long run.

    As such I don’t think that Reddit is getting “bigger”. That profit is like someone who lives in a wooden house, dismantling their own home to sell it as lumber; of course they’ll get some quick cash, but it’s still a bad idea.

    In a letter to shareholders, Reddit CEO Steve Huffman attributed the recent increase in users to the platform’s AI-powered translation feature.

    Let’s pretend for a moment that we can totally trust Huffman’s claim here. Even human translations often get some issues, as nuances and whatnots are not translated, and this generates petty fights, specially in a younger userbase like Reddit’s; with AI tendency to hallucinate, that gets way worse. And even if that was not an issue, a lot of content is simply irrelevant for people outside a certain regional demographic.

    *EDIT REASON: I switched the terms, sorry. (C’mon, I’m L3.)

      • Lvxferre@mander.xyz
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        23 days ago

        Yup, it is 100% relevant! Selling user data is extremely profitable, specially with a large userbase. However, it lowers the value of the platform - it makes users less eager to genuinely contribute with it (due to privacy concerns, seeing it as a “they’re exploiting me!” matter, etc.). As such the data being generated there becomes less useful, less relevant, and less profitable over time, paradoxically enough.

        • OpenStars@discuss.online
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          23 days ago

          Over time yes, but then again those most likely to leave have already done so. At this point I don’t expect anymore large exoduses from it, but even if there were I’m not so sure that they would come here.

          Conservatives would not feel welcomed in the slightest (nor should they, hey-oh!:-), normies would not feel comfortable due to the heavy need to block every damn thing here just to survive it, and especially the people who think they are leftists (as I once naively thought, with zero evidence I should add!:-P who wants to bother actually looking up definitions of terms? especially if everyone around you is a conservative and thus it makes no functional difference) will find themselves most likely to become dogpiled onto by the people most ah… “eager” to look down upon their fellow human (and some as we so recently and unfortunately discussed go so far as to tell others to kill themselves - highly inappropriate language, especially coming from an instance admin).

          So even if some were to leave, where would they go? Twitter is dead, having been eaten from the inside by X and cancelled, then necro-birthed into its current undead existence. And Facebook… just… no. Threads then? Maybe in a few years but either way it’s not comfortable and familiar like Reddit is. So even if people left Reddit, I would expect them to go crawling right back into it, maybe just change their subs or some such. Especially when they roll out subscription model to avoid (some of) the ads, though it’s too soon still as they get people used to them slowly but surely… just like a frog in a pot being cooked slowly (except that’s a false story, bc irl the frog actually does have enough sense to jump out!).

          Or maybe they’ll simply touch grass, until they can’t stand that anymore?:-) Playing games rather than talking with people can be a real distraction from the grittiness of life - and then there’s Discord servers that so long as you only want a singular specific game, actually do offer a convenient method to discuss such a focused topic.

          So “less profitable”, I guess we’ll see. Probably somewhat less, but substantially so? That I dunno.

          • Lvxferre@mander.xyz
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            23 days ago

            I’m not expecting a big exodus, but rather a slow decline in both the number of users and their engagement. With a few peaks here and there that seem to revert the downwards trend, but each peak being smaller than the one before.

            They won’t be leaving for the same reason as most people here did, pissed at the IPO-related changes (such as killing 3rd party apps). It’ll be more like “…meh, why would I check Reddit? There’s better stuff elsewhere.” We can already see the decline of the content quality in Reddit now; it’ll get only worse over time.

            I think that most will end in Discord. Some in Bluesky, and some will simply touch grass. Conservatives might end in Minitrue “truth social” or crap like that.

            Facebook might perhaps absorb some of the former Reddit users. It feels disgusting for the privacy conscious, but for them it’ll be a simple matter of not finding interesting stuff in Reddit.

            The same applies to Reddit’s liquid profit - for now, that value extraction still creates a small peak on raw profit, to the point that the bottom line became positive; later on the peak will barely reach the surface; later on, value extraction will be necessary to avoid making the bottom line too negative.

            • OpenStars@discuss.online
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              23 days ago

              This sounds familiar, almost as if history could perhaps, maybe, just possibly… repeat itself? Nah! (says spez)

              People will follow the content creators indeed. Right now I’m not sure where they went though. The last I looked, it was basically nowhere, though to the extent that it was anything I thought it was X (even if via a temporary Mastodon intermediate). Musk fed Huffman bad info, which the Musk himself was not doing (or rather, the circumstances were entirely opposite - a public company going private rather than one attempting to make the polar opposition transition), and Huffman was dumb enough to fall for it, then Musk rakes in the rewards for his dirty deed.

              Nowadays - or perhaps soon - as you said it might be Bluesky. So trading one corporate landlord for another, but it makes sense - the content creators will go wherever their audience is, and then the latter will in turn mindlessly follow the hoarde, but with an enormous delay measured in high number of months to even years. Plus, content creators need revenue to survive, e.g. how many videos is Ian Danskin (of Innuendo Studios) putting out these days? Then again, how many people especially younger ones even watch 20-30 minute long “video essays”, rather than TikTok(-style) short-form clips?

              All the rest: yup.

              • Lvxferre@mander.xyz
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                23 days ago

                This sounds familiar, almost as if history could perhaps, maybe, just possibly… repeat itself? Nah! (says spez)

                Digg, right? Yeah. Perhaps spez even knew that it would repeat, but was smart (and shitty) enough to jump off the ship before it happened.

                • OpenStars@discuss.online
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                  23 days ago

                  Definitely Reddit’s buildup was smart. The transition to profitability not so much. Although we’ll see.

                  Man, remember all those who kept arguing against it? I would say “Reddit is dying”, and these new accounts that had never visited my sub before we decided it should go dark suddenly appeared and started talking crap about anyone who criticized Reddit. That should have been a smoking gun alone for people to realize what was going on. But instead, people just said “yup, that’s Reddit for you”. Which extremely unfortunately… they were right, bc that is what it had become by that time.

                  i.e., spez didn’t kill Reddit by denying the usage of third-party apps - that was merely the final nail in the coffin for many of us, topping off a process that had begun several years earlier.

      • Lvxferre@mander.xyz
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        23 days ago

        I think that most users there are still human beings, but botting has become a big enough problem that the platform can’t be seen as a place for genuine content any more.

        • FartsWithAnAccent@fedia.io
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          23 days ago

          I am becoming increasingly skeptical of that, repost bots run completely unchecked: The admins 100% do not give a shit and haven’t for a long time, pretty much always ignoring reports because it artificially inflates their numbers.

          • Lvxferre@mander.xyz
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            23 days ago

            Bots are parasites: they only thrive if the host population is large enough to maintain them. Once the hosts are gone, the parasites are gone too.

            In other words: botters only bot a platform when they expect human beings to see and interact with the output of their bots. As such they can never become the majority: once they do, botting there becomes pointless.

            That applies even to repost bots - you could have other bots upvoting the repost, but you won’t do it unless you can sell the account to an advertiser, and the advertiser will only buy it if they can “reach” an “audience” (i.e. spam humans).

            • FartsWithAnAccent@fedia.io
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              23 days ago

              I’m not saying there aren’t still people there, I’m saying a HUGE number, possibly even the majority, are bots. Might not be more than 50% yet, but there have always been a lot of bots on reddit and it only got worse over time.

              • Lvxferre@mander.xyz
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                22 days ago

                Yup, I got that you don’t mean that everyone is a bot there. I just don’t think that there aren’t so many of them as you’re saying; it’s certainly not as much as half the users, or even the activity (bots tend to be more active than actual users).

                They’re still wrecking damage on the place though. Eventually they’ll reach a plateau in proportion, but their numbers will go down, alongside the actual users.

                • FartsWithAnAccent@fedia.io
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                  22 days ago

                  Maybe, maybe not, but I’m pretty damn sure they’ll never disclose the actual numbers or police repost or astrotufing bots.

    • S_H_K@lemmy.dbzer0.com
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      23 days ago

      value exploitation

      I tried searching that term but had no luck any article I could use to know more?

      • Lvxferre@mander.xyz
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        23 days ago

        I fucked it up and switched the terms, sorry. Look for “value extraction” instead; you’ll find multiple references to the concept such as this or Mazzucato’s “The Value of Everything”.

        To keep it short: you create value when you produce desirable goods/services for the customers; however, when you extract it, you’re picking the value that was already created (by society, your customers, or even your own business) and turning it into profit. The later is faster but unsustainable, as that value doesn’t pop up from nowhere, so when a business shifts from value creation to value extraction it’ll get some quick cash and then go kaboom.

        In Reddit’s case, this value is mostly users willing to generate, curate, and share content with the platform, and other users knowing this:

        • someone recommends you a product/brand. The person might be wrong, but you were reasonably sure that they aren’t a corporation astroturfing their own product. Someone else might criticise it instead.
        • you hop into your favourite subreddit and, while the content there isn’t the best, it’s still good enough - because the mods gave some fucks about growing their subreddits;
        • you discuss some controversial topic. You might get dogpiled, but at least you know that the dogs piling you are human beings, that sometimes might listen to reason; a bot will never;
        • et cetera.

        All that value was being slowly extracted through the last years, but the changes in 2023/2024 did it the hardest.

      • Lvxferre@mander.xyz
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        23 days ago

        Shorthand for third language [English] speaker. I mean that I’m prone to switch a few words here and there, due to other languages interfering inside my head.