Hypothesis: The owners of the company are no longer interested in keeping the business going, and are just trying to maximize financial return by selling off every possible asset.
In Reddit’s case, the upcoming IPO isn’t the beginning of a new chapter in the business. It’s the end of the business.
The most valuable part of Reddit is its fat corpus of content, built by volunteers over many years, suddenly made valuable for training AI. Now, Reddit’s corporate owners want to sell access to that corpus. That is Reddit’s new business. It’s not a long-term business, because the corpus will decay in value over time. But it’s enough for the owners to cash out.
I’m inspired in this thinking by yesterday’s edition of Rusty Foster’s “Today in Tabs.”. I don’t think he’s making this exact point, but he’s putting all the dots down, without necessarily connecting them.
John Gruber at Daring Fireball notes that OpenAI already scooped up Reddit’s corpus of data when the APIs were free. The data has no value anymore.
Reddit already gave all its data to large companies for free. Huffman is trying to charge now for horses that were let out of the barn years ago. And he obviously doesn’t care about Apollo or other third-party Reddit clients, or what these moves do to Reddit’s reputation as a platform vendor. He’s just trapped in a fantasy where investors are going to somehow see Reddit as a player in the current moment of AI hype.
Also, on Ryan Broderick’s Garbage Day: “Platforms Don’t Really Make Sense Anymore”:
We tolerated large platforms, that were never all that good to begin with, because they were convenient and useful and part of a larger interconnected network of tools and apps and systems that made the digital world safer and more dynamic. So you’d think, if they were actively deciding to stop being part of that larger system and no longer interested in making the internet, as a whole, function better, they would, at the very least, try and be more convenient! But instead we’ve ended up in a situation where all the local stores are gone, Main Street is deserted, and the large Walmarts on the edge of town are being set on fire and left to rot.