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.
As I often mention in other communities, this smells like value exploitation from a distance. Value exploitation 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.
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.
Have to wonder how many of these “users” are actually people too. I’d bet most of them aren’t.