Thanks Iikka, great video, as always!
I personally still believe, like PeeJii above, that Reddit still has room to improve its ARPU and other areas of its business. On the other hand, I also subscribe to those risks regarding Google’s AI summaries.
One dark cloud on the horizon is also the talk of regulation regarding age limits for young people on social media services. As I understand it, the EU’s goal is that age should be verified in some way, meaning that a user’s own declaration of age during registration would not suffice. These opening moves have come from several EU countries, and Australia at least has already banned social media for those under 16, I believe, which Reddit has started to challenge in court; in my opinion, with quite good justification, although I don’t hold much hope that the lawsuit will succeed.
Even though Reddit isn’t this so-called “brain rot” like TikTok and other similar FYP (For You Page) gadgets seasoned with steroid-boosted algorithms, a ban could very well categorically apply to Reddit too, even if the proportion of total garbage there is significantly smaller than in the aforementioned social media platforms. The EU’s regulatory lottery machine in particular is unpredictable, and the spirit of the times is that social media = evil, so Reddit could very well end up in the same company as the others, since you can find the same dross there too.
I’ve also been thinking about the growth of the US market, and it’s true that the limits may start to be reached. However, the company is printing money right now and has recently joined the share buyback party, although the purchases have been moderate so far. Whether the company accelerates its profit distribution or finds other uses for the money remains to be seen.
As a wild card, I’ll also bring up the lawsuit against Anthropic that I mentioned in my previous messages. Reddit already secured its first partial victory in federal court. In my opinion, Anthropic has a very strong incentive to settle its dispute with Reddit before they go public (IPO), because all companies even remotely related to AI are currently “the shit” — even toilet companies (TOTO Ltd., pun intended). Therefore, it’s likely wise to list now while the money is available, and it wouldn’t be a nice start to a stock market journey if Anthropic’s chatbot were trained on unlawfully obtained data, potentially leading to billions in compensation. Therefore, some kind of data licensing agreement similar to those with OpenAI and Google could be likely. And yes, Perplexity is in a somewhat similar situation as Anthropic.