Reading through the Goldman Sachs Communacopia Technology Conference transcript they said the web platform is rebuilt to be 2-5x faster which also improved search on external platforms like Google. The deal with Google sounds multi-faceted, but what’s still unclear to me is the terms behind the 60M deal. It’s said to cover,
- To allow Google to use Reddit posts for training its artificial intelligence models.
- To improve Google’s services, particularly Google Search.
- To provide Reddit with access to Google’s AI models, specifically Vertex AI, for improving Reddit’s internal site search and other features
As for the deal with OpenAI, the dollar amount is unspecified but encompasses the following,
- Content Access: OpenAI will have access to Reddit’s Data API, which provides real-time, structured, and unique content from the platform.
- Enhanced Reddit Content in ChatGPT: OpenAI will bring enhanced Reddit content to ChatGPT and new products, helping users discover and engage with Reddit communities.
- AI-Powered Features for Reddit: This partnership will enable Reddit to bring new AI-powered features to its users and moderators. Reddit will be building on OpenAI’s platform of AI models to implement its vision.
- Advertising Partnership: OpenAI will become a Reddit advertising partner
I wonder how we could possibly judge the potential here…Facebook, Pinterest, Twitter, Roku even…they all have very different web real estate on which to sell ads.
The top tier of Facebook/Instagram is about ~$40 ARPU and Reddit is in the ~$5-10 range. However the use cases are different as they mentioned in this conference that a network like Facebook revolves around friends, family, and DMs. Reddit is more about connecting communities, and there are also more anonymous users.
The CEO said they don’t want their ads to be creepy as in make it too obvious with how much a user is getting tracked. He gave the example, in r/skiing a user might see an energy drink ad as the advertiser would be targeting outdoors people who may want an energy drink.
Some other points from the Goldman Sachs Communacopia Technology conference were,
- CEO says first two quarters came out of the gate strong, did everything they wanted to
- IPO behind us now as lockup period is over
- LLMs are translating content into other languages, human quality translations of the entire Reddit Corpus
- LLMs make moderation better, can detect bullying or rudeness and automate which formerly required humans
- new user retention has become much better connecting users with their home on Reddit
- app is now easier to use, faster, easier on eyes
- web platform is rebuilt 2-5x faster, improved external search on Google and others
- logged is users growing 30% yoy, highest rate in years
- 19 years old now product
- product philosophy is no matter how big Reddit gets, want it to have a small feel
- 90M DAUs half US/half outside
- Reddit is more intentional than traditional social media
- translation of Corpus into French is going “really, really well”
- starting in Spanish now which as 1B speakers, Portuguese and German also a nice foundation, will get to scale
- two decades worth of human conversation of Reddit which is colloquial and good for AI training models
- photoshop request is a like a small business on top of Reddit, people pay $5-10 for edits on photos
- monetization primitives so can charge users for things, or start a small business
- did partnerships with many of the major leagues NFL, NBA, MLB, NASCAR, to make sure we have licensed high quality content and video so users can discuss
- want to give the moderators good tooling, giving the internal safety tools that Reddit has
- spend a lot of time with moderators on Zoom calls, doing in person meet ups, Adopt an Admin program
- mods are more important constituency on Reddit and work side by side with them, want to get a native understanding of the challenges they face
- long road map but straight forward, improve targeting, measurement and performance
- core of strategy: “every user on the Internet can be a Reddit user”
- still feels like a startup even though one of the oldest social media platforms
- organizing around communities and interests which is different than traditional social media
- for ads, moving away from using personal information to using context and interests