New functions: Reddit considers paid subreddits and AI search
Reddit wants to introduce some new features. In addition to an AI search, paid subreddits are also being discussed.
Reddit is thinking about new functions, some of which could be chargeable.
(Image: Ascannio/Shutterstock.com)
Reddit is apparently planning new functions: After announcing the second quarter results, CEO Steve Huffman announced an AI search in the analyst conference and hinted at paid subreddits. The company also wants to charge AI providers if they want to continue scraping page data.
Search with AI
Huffman emphasized that the "free version of Reddit will continue to exist, grow and thrive". However, new functions would also have to be economical. "Now we're going to open the door to new use cases, new types of subreddits that can be built that can have exclusive content or private areas, things of that nature."
Huffman also announced tests with a new search, the results of which will be processed by artificial intelligence (AI). The AI summarizes content, suggests recommendations and should help users to delve deeper into their topics and also find new communities on Reddit, explained Huffman. The test will start "later this year". Search has remained unchanged for a long time, but plays a crucial role in attracting new users, said Huffman. At the same time, the CEO sees an opportunity to generate advertising revenue via search.
Search engines locked out
The company has been looking for new ways to monetize its own business for some time now. For example, it has concluded licensing agreements with Google and OpenAI to allow them to use Reddit content for their AI tools. The company also wants other providers to pay if they want to continue scraping the forums. Without a license agreement, the company would not know what the Reddit data was being used for and would have no control over it, Huffman said in an interview. As a consequence, Reddit had blocked the providers who were not willing to enter into an agreement with them. Huffman mentioned Microsoft, Anthropic and Perplexity by name. "It was a real pain to block these companies," said Huffman.
Reddit has recently taken stronger action against crawlers. Like other websites, Reddit uses the robots.txt file to ban web crawlers from the site. The company adapted this file to prevent scraping. As a result, since mid-July, Reddit results have only appeared on Google, which pays for the analysis of Reddit content. Microsoft's Bing search and the search engines that use Bing results no longer return Reddit content. Jordi Ribas, head of search at Microsoft, wrote on X (formerly Twitter) at the end of July that Reddit had excluded Bing from evaluating the site for search and instead favored another search engine. This impairs the competitiveness of Bing and search engines based on Bing.
Positive results in the second quarter
Reddit reported a positive economic performance in the second quarter of 2024, the company announced. Compared to Q2 2023, revenue climbed by 54% to 281.2 million US dollars (around 257.4 million euros). Reddit also saw an increase in advertising revenue, which rose by 41% to 253.1 million US dollars (around 231.7 million euros). Other revenue shot up by 691 percent to 28.1 million US dollars (25.7 million euros).
The net loss fell to 10.1 million US dollars (around 9.3 million euros) - compared to 41.1 million US dollars (37.6 million euros) in 2023. Compared to the previous year, Reddit recorded a 50 percent increase in revenue and users. The company also increased its daily active uniques (DAUq) by 51 percent to 91.2 million, with 342.3 million active weekly users (up 57 percent). "We had a consistently strong quarter and more people are visiting Reddit than ever before," said Steve Huffman.
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