Reddit: Diversifying Beyond Advertising and Entering the ‘Customer Economy’

During the recent Bloomberg Technology Summit, Reddit Inc. announced plans to launch new products as part of its marketing efforts in the coming months. The company, which recently surpassed sales expectations in its first earnings report following its public listing, aims to diversify its revenue beyond advertising and into what CEO Steve Huffman calls the “customer economy.” This includes users who generate income from others on the platform through various means such as selling subscriptions, digital gifts, collectibles, physical goods and services.

While other social media companies like Meta Platforms Inc. and Nextdoor have established marketplaces for buying and selling goods, Reddit sees them as competitors. In response to this competition, Reddit’s upcoming product offerings will include new versions of rewards, which are digital gifts that users can exchange. Despite the potential risks of scams or counterfeit goods in online marketplaces, Huffman highlighted Reddit’s unique content moderation program as a key advantage. Content on Reddit gains popularity through user votes, ensuring that valuable and authentic content rises above scams.

In addition to expanding its market offering, Reddit is also focused on entering into data licensing agreements with AI companies and exploring potential acquisitions in areas such as search. Huffman emphasized Reddit’s ability to curate quality content among the noise of social media platforms, setting them apart as a trusted source for authentic interactions.