Reddit’s IPO and What Followed | 매거진에 참여하세요

The Price of Monetizing a Community

In the spring of 2024, Reddit went public.

Yes, Reddit—the chaotic, meme-breeding, self-governed internet forum that’s been shaping online culture for over two decades—finally listed itself on the New York Stock Exchange.

It was a symbolic moment. The stock soared to over $50 in the first week,

riding the hype of a “community-first internet going public.” The IPO was priced at $34 per share, valuing the company at around $6.5 billion.

Fast forward to July 2025: Reddit’s share price hovers around $153, with a market cap approaching $19 billion.

But this isn’t just a stock story. It’s a story of how Reddit is rewriting its identity

—no longer just a quirky online community, but a data seller, ad platform, and corporate entity. And that transition hasn’t been smooth.

Advertising Alone Wasn’t Enough

For years, Reddit had a massive user base—over 100 million monthly users

—

but relatively weak monetization. Ads were its main revenue source,

but with surging server costs and a vast network of volunteer moderators, that wasn’t sustainable.

So Reddit made its boldest move yet: selling its data to AI companies.

From Forums to Training Sets

Reddit inked multi-million dollar licensing deals with the likes of OpenAI and Google.

Its treasure trove of comments—conversational, diverse, often brutally honest—became training fuel for large language models.

It also started charging for its API. Until then, third-party apps like Apollo and bots that enriched Reddit culture thrived on free access.

With monetization in mind, Reddit shut that door.

The Community Revolts: “Whose Comment Is It Anyway?”

Reddit’s beating heart has always been its volunteer-run communities and user-generated content.

So when users learned their posts were being sold to AI companies—without consent or compensation—it triggered a rebellion.

• Thousands of subreddits went dark in protest.

• Developers of beloved third-party apps, like Apollo, shut down.

• Even accessibility apps for visually impaired users couldn’t afford the new API rates.

Reddit defended the move by saying fees would only target big tech, not hobbyists.

But in reality, the costs were too steep for most developers—millions of dollars annually in some cases. Community trust took a serious hit.

Reddit Ads: New Engine, Old Frictions

With over 90% of its revenue now coming from ads post-IPO, Reddit is heavily investing in its advertising stack.

Here’s how it works:

1. Promoted Posts

Native ads that look like regular posts, targeted at specific subreddits. For instance, an AI SaaS ad in r/technology.

2. Display & Video Ads

Banners on the homepage and autoplay videos in feeds—aimed at combining meme culture with brand storytelling.

3. Brand Takeovers

Full-day homepage sponsorships by brands like Coca-Cola, Samsung, and Apple. It’s expensive, but high-impact.

Reddit’s Secret Weapon: Subreddit Targeting

Reddit’s niche-based structure allows for laser-sharp ad targeting:

• - r/WallStreetBets for investors

• - r/DIY for home improvement enthusiasts

• - r/PS5 for console gamers

No other platform offers that level of contextual alignment between user interest and ad content.

But Users Aren’t Happy Ad Engines

Despite ad sophistication, Reddit faces real obstacles:

• - Hostile Ad Environment: Users openly mock and downvote promoted posts.

• - Brand Safety Risks: Memes and edgy comments can quickly turn problematic for advertisers.

• - Tooling Gaps: Reddit Ads Manager lacks the polish and usability of Facebook or Google Ads.

To calm tensions, Reddit rolled out a creator revenue share program

—a step toward becoming more like YouTube or TikTok. Popular posts and moderators can now receive a cut of ad revenue.

But it’s far from perfect.

Only the clean, advertiser-friendly content gets monetized. Political, adult, or controversial posts? Excluded. Many users say payouts are too small to matter. Some moderators say, “We feel like unpaid Reddit employees now.”

Reddit’s Identity Crisis

Reddit today is no longer just a social forum. It’s:

• - A public company with quarterly earnings pressure

• - An ad-tech platform

• - A data broker to AI giants

Yet, its true value still lies in its culture: users freely posting, debating, and memeing.

Reddit’s gamble is to monetize without killing what made it special in the first place.

That balancing act is proving harder than expected.

So What’s Next?

Reddit’s Q2 earnings, due July 31st, will be a pivotal moment.

If revenue growth aligns with expectations, Reddit’s strategy might be validated—at least in the eyes of Wall Street. But if the numbers fall short, Reddit could face a community exodus and a sharp correction in both value and trust.

Because in the end, you can’t sell community without keeping it alive.

Would you still post on Reddit today?

PS: Reddit is one of those dream MVPs many founders wish they built.
Before chasing the next Reddit, test your MVP at bunzee.ai.