this post was submitted on 01 Jul 2023
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Reddit’s been on a death spiral for over a year. The API changes are a Hail Mary to try and generate money. This valuation is bad.
It very much isn't a hail Mary to generate money, they'd have bent over backwards if they'd wanted to keep big players like Apollo and RIF on board, if it had been a hail Mary. 20 million bucks a year is nothing to be sneezed at.
The fact that they left Apollo out to dry shows that it never was about making more revenue, but rather to stamp out competition for their own app. As soon as it has accessibility parity with other apps, it'll turn off API access for unofficial reddit apps alltogether.
By driving out third party apps, it forces users onto their own, which forces users to view ads.
A year ago, Twitter was bought for $44b. That should have increased Reddit’s valuation, but it didn’t. User growth has also been growing for them. The only reason I can think of for the drop in value is if they had a drop in ad spending. Driving users onto their app where they force them to view ads is one way of driving that ad spending back up.