Reddit Users Are the Least Valuable of Any Social Network (cnbc.com) 184
Reddit's latest funding round values its users at a lower price than any other social network. "The company announced Monday it had raised $300 million in its Series D investment round at a valuation of $3 billion," reports CNBC. "CNBC previously reported the company's annual revenue topped $100 million, according to sources familiar with the matter, and at 330 million monthly active users (MAUs), this would make Reddit's average revenue per user (ARPU) about $0.30." From the report: That estimate would make Reddit's ARPU significantly lower than other social networks, even those with similar MAUs. Twitter, for example, reported 321 MAUs for its latest quarterly report, and with annual revenue of about $3.04 billion in 2018, that would make its ARPU about $9.48. Facebook reported 2.32 billion MAUs in its latest report and ARPU of $7.37. Snap does not report global MAUs, but reported $2.09 ARPU in its latest quarterly report.
Pinterest, which has yet to go public but is preparing for an IPO this year, says on its website it has 250 million monthly users. Pinterest declined to comment on their revenue, but a September article in The New York Times said the company was on track to top $700 million in revenue for 2018. That would bring its ARPU to about $2.80. While Reddit's value per user is much lower than its peers, it is betting its access to a valuable demographic will appeal to advertisers and potentially even draw their dollars from larger rivals like Facebook and Google. The company said half of its MAUs are between the ages of 18 and 24.
Pinterest, which has yet to go public but is preparing for an IPO this year, says on its website it has 250 million monthly users. Pinterest declined to comment on their revenue, but a September article in The New York Times said the company was on track to top $700 million in revenue for 2018. That would bring its ARPU to about $2.80. While Reddit's value per user is much lower than its peers, it is betting its access to a valuable demographic will appeal to advertisers and potentially even draw their dollars from larger rivals like Facebook and Google. The company said half of its MAUs are between the ages of 18 and 24.
bad numbers (Score:2, Insightful)
Re:bad numbers (Score:4, Interesting)
I assume all of the big online companies would count that way. At least it's objective, and it's likely to give bigger numbers than any plausible alternatives I can think of.
I'm more interested in this:
While Reddit's value per user is much lower than its peers, it is betting its access to a valuable demographic will appeal to advertisers and potentially even draw their dollars from larger rivals like Facebook and Google. The company said half of its MAUs are between the ages of 18 and 24.
There is a reason that today's young adults are referred to as "Generation Me" in marketing circles and that the phrase "entitlement culture" is heard so often. As someone who has worked in this field, it's not particularly surprising to me that a business where so many of its users are young adults also has much lower revenue per user. If I were starting a new business today, the 18-24s would be literally the last age range I would want as my target market. They have little money, they tend to care more about experiences than possessions, and when they do spend they are heavily fashion-driven and quick to change. What is surprising is that Reddit reportedly thinks this is a valuable demographic.
Re:bad numbers (Score:4, Interesting)
There is a reason that today's young adults are referred to as "Generation Me" in marketing circles and that the phrase "entitlement culture" is heard so often. As someone who has worked in this field, it's not particularly surprising to me that a business where so many of its users are young adults also has much lower revenue per user. If I were starting a new business today, the 18-24s would be literally the last age range I would want as my target market. They have little money, they tend to care more about experiences than possessions, and when they do spend they are heavily fashion-driven and quick to change. What is surprising is that Reddit reportedly thinks this is a valuable demographic.
Bizarre rant. Points for that, but probably wrong.
More likely these users are not as valuable per unit because there is less information to ferret from reddit accounts. They are less "sticky" and don't require or promote as much voluntary disclosure. Facebook, as we have seen, is one step away from being your personal KGB guardian angel, they appear to infest your life and suck everything that you don't explicitly forbid, and a few things that you don't know you haven't forbid yet. We have also seen exactly how valuable that data is to marketing and even hostile foreign nations. Obviously they get paid well for their espionage. Google is only slightly better.
Re:bad numbers (Score:4, Interesting)
For what it's worth, our numbers wouldn't support your theory. We do get decent returns on Facebook ads (and our Facebook metrics do support the theory that 18-24s don't spend much) but we also get decent returns running old-school untargeted ads or referral schemes through other websites or press relevant to our products and services. Facebook has the advantage of being huge and therefore scaling up where often websites for interests have well qualified but small audiences, but it's far from clear that all the profiling is making much of a difference to any metrics that actually matter compared to just advertising in places relevant to whatever interests you're catering for.
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They have little money, they tend to care more about experiences than possessions, and when they do spend they are heavily fashion-driven and quick to change. What is surprising is that Reddit reportedly thinks this is a valuable demographic.
Sounds as though the marketing firms are doing a shit job. Are you telling me that you can't market experiences or take advantage of new trends?
Sounds to me like there's a lot of opportunity with that market since people haven't figured out how to tap into it yet.
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The entire marketing industry has difficulty getting money out of young adults. This is mostly because young adults don't have much money. It's a market with a few runaway success stories (name one 20 year old you know who doesn't have an expensive smartphone, even if the cost is hidden behind a monthly plan) and then a very long tail of trying to extract blood from a stone.
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You seem to be reading something personal into my words that I'm not saying. All I'm commenting on here is the relative difficulty Reddit is going to face extracting value from its user base if half of those users are 18-24s. I'm not expressing any opinion on the ethics of any particular product or service, nor claiming that those 18-24s should or shouldn't be interested in this or that offering. But if they're not, then Reddit has an uphill struggle to convince businesses with those offerings to spend thei
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At the risk of invoking a cliche, it really isn't personal and it really is just business. It is essentially a matter of fact, found time and again across numerous products and services, and discussed time and again among the business community, that as a group today's young adults fit that mould.
Now, of course it's a stereotype. Of course there are exceptions and an entire generation of people is not the same. This is understood. It is also, to be blunt, not very interesting in this context. We are talking
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I don't know if you're the same AC who replied to me elsewhere, but you do seem to be making the same mistake of confusing personal opinion with professional experience. You keep talking about questions and beliefs and perceptions, but professionals will go to considerable lengths so they don't need to speculate.
Professionals want hard data from demographic surveys, in-person interviews with customers and prospects, and the like. They have resources to collect that data, so they can make informed decisions
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Recently SNL had a faux game show "Millenial Millions" which seems apropos to your "Generation Me" comment:
https://www.youtube.com/watch?... [youtube.com]
I found the clip enjoyable, but honestly, it doesn't feel like funny comedy, more like laugh-else-you'll-cry comedy.
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Thank you. I haven't laughed so hard since I was about the age of those kids.
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Bravo to them. Less materialistic, resistant to marketers. Perhaps the advertising backlash is finally starting.
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Socially and culturally, you may well be right and the trend may be a healthy one.
However, in this discussion, we were previously talking about the economics of the situation. A lot of those experiences are only cheap/free because they are being subsidised in some other way, and sooner or later, someone still has to pony up some real money so the people working to provide those experiences can pay the rent too.
Usually that happens through one of two mechanisms. One is some sort of disguised or indirect paym
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Yes. You've outlined all the reasons why I think we need a backlash against advertising, and advertising supported goods and services.
Modern targeted advertising not only hides the true cost, but also hides the terms of the exchange from one party. Most people don't like it when they find out what those terms are. The whole system distorts the market and acts as a perverse incentive for marketers to engage in all kinds of shadiness. Then some of them have the nerve to try to convince people that they some
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Don't get me wrong: I couldn't agree more with almost everything you're saying. And personally, I too prefer to pay an honest, clear price for something up-front instead of having it wrapped up in lock-in deals and so on. As I mentioned elsewhere, I don't even have accounts on most of the big social networking sites, in part because I don't believe I fully understand how they operate and what the consequences are or might become.
Unfortunately, almost none of this is true for the average person in the 18-24
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If I were starting a new business today, the 18-24s would be literally the last age range I would want as my target market. They have little money, they tend to care more about experiences than possessions, and when they do spend they are heavily fashion-driven and quick to change. What is surprising is that Reddit reportedly thinks this is a valuable demographic.
Apart from that they have little money, how is the rest a downside? If the market is full of sober fact-checking and people stuck in their ways you can do well without much marketing, it's when people are impressionable and fickle that good marketing matters. Same goes for selling experiences, if you're selling a hammer most of your effort goes into production costs and logistics. How do you turn a wine bottle and some arts and crafts supplies into a paint & sip experience? Marketing. Most students aren
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Apart from that they have little money, how is the rest a downside?
In a word, inconsistency. We are living in a time when a single tweet by a reality TV star can wipe a billion dollars off the market cap of a social network. It's tough to justify investing significant budget to build something new and different, even if it's getting great feedback during initial experiments, when it could literally be everyone's must-have today and everyone's once-had tomorrow. From a business point of view, less impulsive markets are much easier to plan for and carry much lower risk.
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I'm not blaming anyone for anything. I'm just observing the economic reality.
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There is a reason that today's young adults are referred to as "Generation Me" in marketing circles and that the phrase "entitlement culture" is heard so often.
There is a delightful irony in one group of people using the phrase "entitlement culture" to describe another group who won't give them money.
Same, plus another thing. Not only do they have little money, they seem to have the most aggressive competition for their nonexistenty cash. It's very strange.
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There is a delightful irony in one group of people using the phrase "entitlement culture" to describe another group who won't give them money.
There's nothing wrong with one group choosing not to give the other money. The term "entitlement culture" usually refers to one of those groups choosing not to give the other [much] money but expecting something of [greater] value in return anyway.
We've been having this debate about areas like copyright and piracy for a long time. Today, similar issues also arise with business models like ad-funded online services or freemium pricing. Relevant example: People who spend several hours a day using social netwo
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You're confusing personal opinions with professional experience. That's another common trait of Generation Me.
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But I heard it is going to be the new slashdot, so maybe? LOL
I'm worthless... (Score:3, Funny)
Ask me anything...
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Who are you? :P
Least Valuable out of These Five Companies (Score:5, Funny)
Wasn't Slashdot's value written down to $0? Is MySpace still around? Digg? Hard to believe Reddit users are 'the least valuable' for a social network.
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Wasn't Slashdot's value written down to $0? Is MySpace still around? Digg? Hard to believe Reddit users are 'the least valuable' for a social network.
It's actually -$0.02.
-my two cents
Re:Least Valuable out of These Five Companies (Score:4, Interesting)
Wasn't Slashdot's value written down to $0?
That would be an underachievement for Slashdot users if we were merely valued at $0.
I would hope that advertisers see us as a highly negative value.
In other words, advertising to us actually hurts their product sales.
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I haven't ever really seen any advertisement here. Well, other than the occasional slashvertisement article that slips through. I can tell you that they regularly uncheck my "disable advertisements" box. Not that that does anything, but it reminds me how scummy the last few owners are and have been.
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I can tell you that they regularly uncheck my "disable advertisements" box. Not that that does anything, but it reminds me how scummy the last few owners are and have been.
Yeah, I love that box. On my desktop I've got ads well and truly blocked, but on mobile that checked box appears right under two big fat ads presented to me directly by Slashdot. Disable? I do not think that word means what they think it means. New boss, same as the old boss.
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$0.30 a user seems much more reasonable. It's hard to believe Facebook manages to rake in almost $8. Perhaps this is investors realizing that can't last.
Re:Least Valuable out of These Five Companies (Score:5, Interesting)
I would think that Slashdot's eyeballs are pretty valuable, as most of us are probably 40+ year old IT workers with six figure salaries.
Compare that to Reddit, where most of their customers are broke college students sharing dumb memes with each other and downvoting everyone that disagrees with them.
Sure, most of us here are smart enough to use ad blockers, but it seems that Slashdot has found ways around that and snuck in enough sponsored content to keep them afloat.
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Re:Least Valuable out of These Five Companies (Score:5, Informative)
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After all that’s where all of these companies derive their “value” from.
Interestingly, there seems to have been some evidence recently that running ads that are heavily personalised/targeted isn't necessarily much more effective than the traditional approach of running your ads in places where your target market are likely to be found. That is, do you really get better returns if you have $x to spend and run advertising on Facebook targeted by interest than if you just run ads on websites or other locations relevant to that interest?
General-interest publications (Score:3)
there seems to have been some evidence recently that running ads that are heavily personalised/targeted isn't necessarily much more effective than the traditional approach of running your ads in places where your target market are likely to be found.
Which leaves a problem for publishers of general-interest publications. A special-interest publication attracts inherently targeted advertisements, but it may not have sufficient ad sales budget to make advertisers aware of its (smaller) audience. A general-interest publication may have more of an ad sales budget, but an ad that reaches every reader of a general-interest publication is less effective than an ad that reaches only a targeted subset. In fact, Beales and Eisenach report [politico.com] that in 2014, advertiser
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I am personally a sceptic about relying too much on ad-funded content as a business model, particularly online. It's clear which way the winds are blowing in terms of ad-blockers, and while it was possible for a while for those who didn't know how to block to subsidise those who did, that model isn't sustainable as knowledge grows. I don't expect that shutting interested visitors with ad blockers down with some snotty "You need to disable your ad blocker to read this article" kind of message is going to wor
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Would love to see evidence ad companies are wasting billions of dollars a year understanding their market...ad targeting has been going on since.....newspapers in the 18th century at least
That's not what he's saying. Advertising e.g. bicycles on a cycle-related reddit is targeted advertising, but it doesn't require tracking individual user browsing history. Advertising bicycles later on to that same user when he's looking for e.g. a video card is what doesn't seem to yield much.
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I can't remember exactly where someone linked me to recent stats, but it was only a few days ago, so if I come across that discussion again I'll post the link here.
In any case, the businesses with billions to spend on ads aren't wasting money understanding their market. But they're also perfectly willing to pull multi-million Facebook ad spends when Facebook change their algorithms and returns take a hit. If Facebook ads were so much more effective, Coke wouldn't have been running all those carefully chosen
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Any time you find yourself on a network communicating to someone other than yourself, you're being social by way of the network.
You're here. I'm here. We're discussing.
Bazinga.
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TL;DR except for the glance at "For me the defining ..."
You don't get to define social media.
Thanks for the social interaction using this media.
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Any network is a social network, unless it's not used by human beings, in which case "social networking app" is redundant, because applications are actually intended to be used by human beings, or whatever passes for them these days.
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Any network is a social network, unless it's not used by human beings ...
See, for example, ants.
Interpretation (Score:5, Interesting)
OK, so how are we going to interpret this?
Is Reddit bad at selling their users data or is it that Reddit users doesn't share as much of it as users on other platforms.
In the case of social media "being worth the least" means that you keep your important data private and won't get fooled by personally targeted ads.
Re: Interpretation (Score:3, Interesting)
This. If reddit values it's users least among social media platforms (in dollars), it values it's users most among social media platforms (as humans).
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It has nothing to do with Reddit valuing it's users. They constantly remove and hide very popular subreddits that are advertiser unfriendly. The reason reddit users are so worthless is because Reddit's age demographic is the poorest and least likely to buy anything. Reddit is just Facebook for poor people
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...one final option is that Reddit users don't respond to advertising when it's thrown at them.
This probably holds true for the likes of slashdot too - we're mostly techies, and a larger proportion of us have ad blockers than the general populous, and so probably less 'valuable' to the majority of advertisers. Like vast swathes of Reddit, we're a minority, a niche of society.
The truth is, both slashdot and Reddit are made by humans. We're all susceptible to advertising (if we see it). However, being niches,
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21st Century Psalm (Score:2)
What's the evidence for this oft-repeated claim? That we behave differently in a culture saturation-bombed with advertising than when wearing a saffron robe in a remote retreat hidden away in the inaccessible hills of northern India? I've never had a clear picture how the A/B groups are factored, here.
I know that advertising affects me. This is because when I notice advertising, I make a conscious mental note that the brand is overpriced, due to a high cos
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I can't say why, but I definitely get the vibe that Reddit has a lot of low income people among its user base.
My best theory is that it skews very young, and it demonstrates that the dominant age demographic is just showing how bad wages are. I'm not convinced, though, as in my experience the internet has always skewed young but so many postings I see on Reddit kind of scream "poor and more rural".
But it could be some other, weirder dynamic involving Reddit's appeal among less affluent people generally.
No surprise there (Score:4, Insightful)
Re:No surprise there (Score:4, Insightful)
But that's hard! Doing real stuff is really hard.
Selling something you get for free to people who then sell the promise of selling more of stuff you don't have to people who don't want it is way easier. Not very useful, I give you that, but where's the profit in that?
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Ps: can we stop selling each other's users and advertising content and get back to developing selling real stuff, fly to moon and mars and fun things like that?
Don't worry, there are a lot of humans and we can do both. For more MBAs than rocket scientists after all, and it's not like the humans who can make valuable contributions are being lured into the user-selling business.
Wow (Score:3)
Just imagine what kind of people litter antisocial networks, and now we get to hear there's a place where even MORE worthless people hang around!
I gotta see that!
Le upboat xdddd (Score:2)
Reverse correlation (Score:5, Insightful)
Funny, cause reddit is also one of the networks with the highest quality of comments. I guess that according to ad-tech companies, people are valuable the more they are stupid & passive consumers.
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I almost agree, except for likes/unlikes which I find useful. Also shittier usenet is still better than no usenet.
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> Funny, cause reddit is also one of the networks with the highest quality of comments.
So true. Comments on Reddit can get upvoted to the hundreds, even thousands, but I've never seen a comment on Slashdot go past 5.
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Re:Reverse correlation (Score:4, Insightful)
Reddit is a Social Network? (Score:5, Insightful)
Since when? Are we now just calling any website that has user accounts and topic discussion a "social network" in hopes of investment money?
And if so, hasn't that bubble already popped?
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Well, yea, because that's what it is. Heck, usenet is a social network.
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Social networks are characterized by social graphs. Neither Usenet nor Reddit have those.
Curiously, Slashdot has a weak one, mostly only useful for sorting comments based on known quality or dysfunction.
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Social networks are characterized by social graphs.
That's how you categorize or analyze them, but not how you recognize them. A social graph is a representation of a social network, not a prerequirement. A social network [wikipedia.org] is a social structure made up of a set of social actors (such as individuals or organizations), sets of dyadic ties, and other social interactions between actors.
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If it cannot be represented as a social graph, then there probably aren't dyadic ties. A "dyadic tie", as I understand it, would be something like the "friend" or "mutual follower" relationship.
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Or just people interacting, like on usenet or some website forum. From which it's quite simple to build a formal social network graph.
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Are we now just calling any website that has user accounts and topic discussion a "social network" in hopes of investment money?
I think they're defining "social network" as a site where the bulk of the content is from the contributions of its users, and not the people running the site. I agree that it doesn't quite fit with what I think of when I think of a "social network", but the term is hard to define and it's not clear where to draw the line.
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Yep, that's why it's an outlier. Reddit has the lowest-value users for advertisers of all social media sites **if you were to consider it a social media site**. Which almost no one does. People don't build and advertise networks of association on Reddit. Use of real names is rare. There are no "followings". Reddit is a discussion board.
It was an investment by the Chinese government (Score:5, Interesting)
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Reddit got the investment, and now any post that gets too popular and is negative about the Chinese government gets removed from /r/all and /r/popular. It was proven quite quickly because several BIG posts about Tianamen Square were removed that day.
Basically, reddit has become an arm of the Chinese propaganda department.
China: putting the red back in reddit.
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"To learn who rules over you, simply find out who (or what) you are not allowed to criticize." -- Kevin Strom (misattributed to Voltaire)
Ah yes, that coveted demographic... (Score:2)
FTFY (Score:2)
reality vs stock value (Score:2)
of all the social platforms available, i find reddit to be the best one.
yet, it is of lowest value, that says a lot.
we could probably link the 'ARPU' to a site's quality and use it as a way to determine the most 'honest' social network.
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Once a topic is found, the day to day questions and support is of good quality.
The people who add their smarts and skills to that site as comments know their topics.
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The advice (Score:2)
Why does that collections of questions and good advice have no value?
People swap advice and learn about their topic of interest.
Strange that educational and near real time support that is on topic has no value?
Because Reddit doesn't ... (Score:3)
... spam you with ads as much as other services so.
Reddit isn't about selling out it users (Score:5, Interesting)
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Also, the way it's used is different. People tend to be anonymous, and even have multiple identities for posting different kinds of content, so it's hard to know what even constitutes a "user". It's more discussion based (long-form discussion rather than quick posts), with a lot of independent communities, so I'd imagine it's hard to make much of an impact with a quick post engineered by a social media team.
Last time I saw the word "ARPU"... (Score:2)
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Is Reddit really "social media"? (Score:2)
I have a hard time categorizing Reddit as "social media". Don't get me wrong I like the site and probably use it more than any other social media site, but to me it's basically just a (barely) update UI for traditional forums what have existed since the birth of the net.
Oh, thank YOU Reddit Brokers (Score:2)
We smoked the newsies by a good 45 minutes in reporting the Wells Fargo outage and did it with better details, wielding the TRUTH, instead of just saying "Internal issues". We helped a ton more folks with fewer trolls and jerks with their money and mental issues than Facebook could shake a stick at.
Devalue us again, and I'll see you characters in Shanghai at the shareholders conference.
/r/Reddit_Users_are_less_exploitable (Score:2)
Not really a surprise (Score:2)
The comment section of a community is a great example of how valuable the community is, and Reddit consistently rewards short dumb posts or jokes, but any sort of debate or intelligent thought contrary to popular opinion is usually down-voted to oblivion.
Their voting system is fundamentally broken, and geared towards flash rather than good content.
Slashdot's voting system -- in comparison -- is great, which is why Slashdot has lasted as long as it has (21 years!) even though it's usually days late to the ne
Reddit worth $3 billion?? (Score:2)
Careful (Score:2)
Re: You (Score:5, Funny)
Does this mean that 4chan users are more valuable then?
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Well.. I often see posts on /b/, presumably by redditors, touting various reddit threads, but I've never seen anyone advertising 4chan on reddit.
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If you see posts on /b/ you should probably also know the first rule of /b/.
/b/ stands for "bland" these days. The old spirit is long, long gone. /pol/ still gets up to some shenanigans, but the cancer killing /b/ actually killed it years ago.
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Sure, if you want something trolled, doxxed, or ddosed, or someone swatted.
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Anti-social network?
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