Earlier this week it was announced that Reddit, the social network that only a few of your outlier friends hang out on, had raised $200 million in new venture funding. That means that it is now valued at $1.8 billion according to CEO Steve Huffman.
Now, that’s a large figure by any measure. Well, perhaps by most measures, but not when you compare it to Facebook’s monstrous value of $500 billion in market value. I guess, if you were Huffman, having seen Facebook’s rise at around a similar time to when your own web foray was making moves, you’d be tempted to consider whether it was time to steal a few plays from the strategy book of your one-time rival.
I want to land that last point. Yes, there was a time when you actively made a choice on whether you were going to spend your time engaging with a community on Reddit or Facebook. These were wholly different communities by character. But on the face of it, Reddit may have been the one you thought would have an advantage. Presented with the option of engaging with friends and family over the internet, versus individuals from different parts of the world, that you couldn’t possibly meet in person as the distance was too great and these people shared the same interests and quirky as you, which seems like a better use of the multifaceted potential of the internet?
Yet here we are today, with a clear winner and a bunch of much smaller networks that are working hard to remain relevant. And when we say relevant, we mean numbers, active users and the ad revenue that that brings. Sure, it’s cool to have a site with a small devoted following but what’s really cool is a company that’s worth several billion dollars.
You may not agree with me, but it looks like Steve does. As a result, it looks as though Reddit is about to look a whole lot more like Facebook and Twitter, in terms of design. This makes perfect sense, in the long run. But in the short term, they may want to make these changes more iteratively. It wasn’t so long ago that Digg was a popular social network. It went ahead with a bold redesign to bring in new users too. Trouble is, they changed too much, too quickly. As a result, that devoted following which kept them ticking over felt betrayed and abandoned by the would-be contender. Now Digg is mentioned in the same breath as MySpace, Bebo and FourSquare (remember when everyone was checking in to a venue for some reason? What was that all about?).
Yes, it’s crucial for the survival and long-term success of Reddit that it doesn’t continue to look as though it’s wearing the same clothes it had on since the 90s. No one hangs out with that guy. But you also don’t enjoy spending time with someone you thought you knew, who suddenly changes over night. That’s not someone you can trust or share your data with so they can then sell that data to advertisers for large sums of money.
The front page of the internet, as Reddit refers to itself, is often the birth place of the most popular viral memes. As an advertiser, if you could influence the individuals that bathe in the meme spawning pools, you could significantly impact the awareness of your brand. That would be hugely attract live. So long as you can convince brands that your site is the place where the cool kids hang out.