Why is Reddit losing money? Ahead of its IPO, Reddit's spending on research and development amounted to an eye-popping 55% of its revenue.

Reddit kind of anticipates this critique in its investor docs, and argues that it didn’t really start operating as a serious business until 2018 when it finally started “meaningful monetization efforts” — that is, trying to make money for real.

But that’s still six years ago. What has Reddit been doing since then?

One big, obvious answer: It has been hiring a lot of engineers and spending a lot of money on their salaries…

…What am I missing? I asked Reddit comms for comment but they declined, citing the company’s quiet period before the IPO.

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  • drislands@lemmy.world
    0·
    10 months ago

    (Note: There are some dumb stories floating out there about Reddit CEO Steve Huffman getting paid $193 million last year. You can ignore those in general since they are really about stock and options awards with a long vesting period. And you can specifically ignore them for this story since those costs aren’t included in the R&D totals.)

    From the article. Reddit wants you to believe it had $193m to throw at the CEO, to imply they are great at making money. The more people spread this lie the more reddit wins.