Reddit to Launch Monetization Features for Developers and Users

Reddit To Launch Monetization Features For Developers, CEO Steve Huffman Says Users Can 'Create And Earn Money On The Platform This Year' - Reddit (NYSE:RDDT)

Reddit Inc. RDDT has revealed plans to introduce new monetization features for developers on its platform. The move is expected to enable users to create and earn money directly on the site. What Happened: During the company's second-quarter earnings call, Reddit's CEO Steve Huffman disclosed the company's intention to introduce monetization features within Reddit's developer platform. This would allow users to create and earn money directly on the platform. "We're working towards enabling monetization within the developer platform to empower our users to create and earn money on the platform this year," Huffman stated during the call. The developer platform, which is currently in public beta with a few hundred active developers, has shown promising results. Huffman highlighted examples of custom post types, such as scoreboards and stock tickers, being used in sports and investing communities on the site. While specific details about the monetization features remain unclear, Huffman expressed enthusiasm about the potential for users to surprise the company with innovative applications. Huffman tempered expectations for immediate large-scale implementation, stating, "I can't promise scale or anything like that this year. But getting to that kind of end-to-end proof of concept will be, I think, a really important milestone." See Also: Strategist Warns 'There's A Serious Collapse That's Coming' After Monday's Global Market Crash: 'Tons And Tons Of Yen Carry Trades...Have To Be Closed Out' Why It Matters: Reddit's move to enable monetization features for developers is part of a broader strategy to diversify revenue streams and enhance user engagement. The announcement follows a series of significant financial updates from the company. In the second quarter, Reddit reported a 54% year-over-year increase in revenue, reaching $281.2 million, and a 51% rise in daily active users. Reddit's third-quarter revenue forecast surpassed Wall Street's expectations, indicating a rebound in the digital ad market. However, the stock experienced a decline due to the upcoming end of the pre-IPO lockup for private investors and conservative quarterly forecasts. Moreover, Reddit's enhanced advertising tools have driven significant upside, as noted by JPMorgan analyst Doug Anmuth. The analyst emphasized the need for sustained execution and growth amid tougher competition in the online ad market. Price Action: Reddit Inc. closed at $54.36 on Tuesday, down 4.31%. In after-hours trading, the stock continued to decline, falling by an additional 4.53%. However, year to date, Reddit Inc. has seen an overall increase of 7.77%, according to data from Benzinga Pro. Read Next: Trump Says 'Kamala Doesn't Have A Clue. Biden Is Sound Asleep' As Stock Markets Crash Globally: 'I Told You So!!!' Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Reddit Will Soon Let Users Make Money On Its Platform Says CEO

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Social media firm Reddit's shares were down 4% in aftermarket despite an all around beat on earnings and revenue in its second quarter results. Analysts ascribed the drop to slowing user revenue growth, with investors likely concerned about Reddit's inability to monetize its users despite a 51% annual user growth in Q2. The 51% user growth translated into a weak 2% average revenue per user (ARPU) growth for Reddit, and it dealt the shares a hefty blow in after market trading even though the firm guided third quarter revenue above analyst estimates. Reddit's second quarter earnings were its second publicly released results since its IPO earlier this year. During the quarter, it posted $281 million in revenue, which marked a 54% annual revenue growth, and narrowed down its loss to $10 million from the year ago quarter's figures of $41.1 million. Reddit's advertisement revenue, like its larger peer, Facebook's parent Meta, also grew during the quarter. It sat at $253 million during the quarter and marked a 41% annual growth. Reddit CEO Steve Huffman shared during the call that his firm plans to allow consumers to earn money on the platform later this year. He outlined that "we're working towards enabling monetization within the developer platform to empower our users to create and earn money on the platform this year," with more details available for this feature in the "coming quarters." Another key announcement from Huffman revealed that not only do "users run over a billion search queries a month on Reddit today," but Reddit aims to boost its search experience by "testing new search result pages powered by AI to summarize and recommend content, helping users dive deeper" into Reddit's content. When asked about how he will protect Reddit's unique culture while also trying to make money similarly to the way YouTube and Twitch do, Huffman shared that in his experience, adding new ways of using Reddit did not cannibalize the existing platform. This has led him to conclude that "the existing altruistic, free version of Reddit will continue to exist and grow and thrive just the way it has." However, allowing monetization will "unlock the door for new use cases, new types of subreddits that can be built, that may have exclusive content or private areas, things of that nature." He later added that Reddit's goal this year is to hope for more interactive applications on the platform, such as "scoreboard, stock tickers and Wall Street bets," with one milestone being surprising applications and use cases generated by users. Reddit's second milestone is to "connect the dots on monetization." This involves "getting an end-to-end prototype where a user can basically buy something through a developer platform app written by another user."