[randomdata]

Which is fine. They don't have to be participants on the network if they don't like the terms of engagement.

Of course, this isn't about ads in and of themselves. It's about Reddit (and, to some degree, tech in general) having lost investor interest and Reddit being this close to bankruptcy, desperately hoping that these 3P clients will provide a stable cash infusion to keep the lights on. Ads alone aren't enough; at least not now with the financial hole they have dug for themselves.

Ultimately, Reddit is panicking and doesn't know where to get the money they need real soon. Their historic practice of another investment round isn't going to work this time. Likewise, slowly transitioning to a paid API, giving developers time adapt like Christian proposed, isn't going to work either as, at that pace, there won't be a Reddit by the time the transition is complete.

[judge2020]

They didn't do it for the money - the money is to make it unrealistic for them to continue in any way, and push more end-users to the official reddit app to participate in their ad network. They knew no app was going to pay those astronomical rates unless it's some personal project that only gets charges a dollar a month or so.

[randomdata]

> They knew no app was going to pay those astronomical rates

Perhaps, but they don't have much choice. If the apps paid a reasonable rate with respect to what is reasonable to app developers, Reddit would still go bankrupt. May as well go big and go bankrupt only if that fails then not try and be guaranteed to go bankrupt.

Thing is, Apollo is on board to pay the big price, but Christian has exclaimed he needs more time to make the necessary changes to support it. Problem is that Reddit doesn't have that much time. Bankruptcy is still inevitable on his needed timeline. The power company doesn't care that you plan to make money sometime in the future when developers have had time to get around to making changes to their software. They want their money when they want it and if you can't make good then and there, that's it.

Remember, they're panicking. Their old model of finding new investment every time the plug was about to be pulled is dead and they weren't expecting that. They need legitimate cashflow now and don't know where else to find it on short notice.

Next will be a massive layoff to follow the small layoff earlier this week to address the haemorrhaging on the expense side. The "everything will be okay in a few days" notice sent to employees today indicates that something "not okay" is coming.

[johnnyanmac]

>If the apps paid a reasonable rate with respect to what is reasonable to app developers, Reddit would still go bankrupt.

I know reddit was never profitable, but I'm not convinced Reddit is so short on money that they can't last to 2024. They'd probably do major layoffs like so much of the tech industry has this deal and lighten that load. From what I heard, Reddit employs 2000 workers and I can't imagine they need that many to keep the site operational (For reference, Twitter had ~4k employees pre-pandemic, and peaked at 7500 employees... I'm not convinced that Reddit's site complexity is a quarter of the largest site in the world, despite reddit having plenty of traffic as a top site itself).

[randomdata]

> They'd probably do major layoffs like so much of the tech industry has this deal and lighten that load.

Yes, that is addressed at the end. 'Next will be a massive layoff to follow the small layoff earlier this week to address the haemorrhaging on the expense side. The "everything will be okay in a few days" notice sent to employees today indicates that something "not okay" is coming.'

You don't want to start there if you don't have to. If they can turn things around there is still the possibility of IPO. Current investors have made it clear that they want off the sinking ship. Only staving off bankruptcy by trimming the workforce to the bare minimum is not a good look for the sake of IPO, however. That is saved for the last ditch effort.

[johnnyanmac]

>You don't want to start there if you don't have to.

Of course (I was laid off last month, no dev wishes other devs to be laid off). But to open up my cynical side for a bit: I also don't sympathize with these huge companies taking advantage of (what EVERYONE knew was) a temporary boon in tech and growing off of low interest rates proportions that would not be needed in 2-3 years.

I as an individual saved aggressively for when that bubble inevitably popped and I'd very likely be laid off (fears which came true. Twice.). These companies instead decided to throw all bets in, and I can't exactly sympathize when the obvious future called their bluff. If Reddit didn't have a war chest to help wheather the storm with, I just see that as myopic at best and greedy at worst.

[randomdata]

> I also don't sympathize with these huge companies taking advantage of (what EVERYONE knew was) a temporary boon in tech

While perhaps there is an argument to be made that one can take advantage of another if there is information asymmetry, when you say that EVERYONE recognized the temporary nature of the engagement, to think that temporary hiring under that is taking advantage of a worker is quite silly. A worker needing a guarantee of x number of years of payment had every right to demand it be written into the contract.

> These companies instead decided to throw all bets in

Of course, so did the workers. They didn't have to leave their jobs flipping burgers. They chose to because they saw $$$ in the air. That same greed is no doubt, as before, why they didn't bother putting any conditions in the contract to protect themselves from the downturn you state they knew was coming. They took a chance – sometimes it worked out, other times it didn't. Such is the nature of risk.