Reddit IPO Filings Reveal the Company’s Hopes—and Fears

Mike Powers
Reddit IPO Filings Reveal the Company’s Hopes—and Fears

The amount of time Reddit reports that users spend with its service hasn’t significantly budged either. In September 2021, the company said that US users on average engaged for 28 minutes a day. It ticked up to 30 minutes that December. In December of 2023, the company specified a figure only for “logged-in” US users, though it clocked in at a similar 25 minutes to 30 minutes per day.

Other data suggests that the stock of content on Reddit for users to peruse has been roughly constant recently, despite users’ continued activity. Reddit gained 1 billion posts and comments per quarter in 2022, closing the year with 17 billion pieces of content on the platform in total. But that figure fell to 16 billion last September, potentially reflecting improved measurement or the removal of problematic content, before ending up back at 17 billion last December.

Overseas Struggles

When US internet companies go public they often claim that luring users from overseas will provide powerful growth. Google and Meta now serve billions of people around the world.

Reddit’s overseas prospects look less rosy. Even as it pushes into new countries, such as France and Germany, the dominance of English-language content on the platform appears to be growing. Reddit reported that over two-thirds of all posts in late 2021 through 2022 were in English. By the second half of 2023, that grew to over 90 percent of all posts.

That happened despite Reddit investing in contractors and translators to encourage more content in French, German, and additional languages other than English. One translation project led some Reddit users to think their communities were being run over by spambot rings. Current and former employees say it’s possible that Reddit’s ability to measure non-English content evolved, and that English content hasn’t become more dominant.

Dependence on Google

Like for many online businesses, Reddit’s traffic relies in part on referrals from search engines—primarily the dominant player, Google. In early draft filings, Reddit shared figures showing its reliance on search engine traffic falling through 2022, dropping to a low of about one in five users coming via search results.

That was generally seen as a good sign because it suggested Reddit had a loyal user base and was becoming less dependent on Google. Responding to its search algorithm updates that slashed traffic to Reddit had previously triggered moments of “all hands on deck” crisis at the platform, a former employee says.

Reddit stopped disclosing figures on search traffic in more recent updates, but there are signs it’s becoming more dependent on Google again. The platform’s IPO filing from last month says that in the second half of 2023, about 75 percent of new users added were not logged in, who “typically come to Reddit via search engines.” Reddit says logged-out users spend less time on the service and are less lucrative. Former employees say that’s because logged-out users tend to visit individual posts and then leave, which usually have fewer ads than news feeds that logged-in users curate and scroll.

Bringing More Brands Onto Reddit

After teasing it in an IPO filing last month, the company this month launched Reddit Pro, a free service that provides a dashboard to help businesses understand what’s trending, the audience their posts are reaching, and, of course, pay to boost the reach of their posts.

Brands such as Taco Bell and the National Football League have been testing Reddit Pro. It’s possible the new service could be a precursor to allowing businesses and organizations to open up communities in their name using the convention b/ or o/ to stand out, some former employees say, as alternatives to Reddit’s longstanding use of r/ to denote different communities.

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