I see parallels between Reddit and Hot CopperSocial platform...

I see parallels between Reddit and Hot Copper

Social platform Reddit was busy building an advertising business to compete with the likes of Google and Meta when it found another way to add $US100 million to its bottom line: generative artificial intelligence.

The rise of large language models that ingest huge databases of content and respond with human-like answers – OpenAI’s ChatGPT and Google’s Gemini, for example – has been a huge boon for Reddit.

It listed on the New York Stock Exchange last year at a valuation of $US6.4 billion. It is now worth $US20 billion ($32.4 billion).

Reddit was once the wild west of the internet, a dark online corner that described itself as “the front page of the internet”. It hosted trolls, extremists and was known for having very few rules. Now that 20-year archive of conversations is a serious asset worth serious money.

In the 2024 calendar year, Reddit banked an extra $US100 million in “other revenue” than it did in 2023, which the company’s global chief operating officer, Jen Wong, says came mostly from deals with OpenAI and Google.

On Wednesday, when US President Donald Trump paused wide-ranging tariffs, Reddit’s stock jumped 25 per cent. Wong’s personal wealth jumped at least $US40 million.

Reddit’s revenue has been steadily rising. In 2022, it made $US667 million in revenue. In 2024, it made $US1.3 billion. It is preparing to launch a version of shopping advertising which will allow retailers to promote individual items.

Australia is one of Reddit’s top five countries for active user base, Wong said. This growth has happened organically – it did not have an office here until 2021.

The r/australia subreddit, in which people ask questions or discuss Australian news, has 2.6 million members. The r/ausfinance subreddit, a forum about the local finance sector, has more than 700,000. The forum r/AskAnAustralian, which is exactly as it sounds, has 550,000 “mates”.

“It’s a very mature market for us, audience-wise,” Wong said. “The commercial side is more nascent.”

Wong said there were 17 million Reddit users active each month in Australia, which is an estimate from research firm Ipsos. This is at odds with other third-party data – a 2023 report by the Australian Competition and Consumer Commission estimated there were 1.9 million monthly users.