Reddit CEO bets on WallStreetBets amid stiffer moderations

In an interview, Reddit CEO Steve Huffman said the WallStreetBets episode has demonstrated the durability of the company’s model as it matures and grows. The 37-year-old Reddit co-founder recently changed his Reddit profile picture to the WallStreetBets cartoon mascot of a Wall Street trader with so-called diamond hands, in a demonstration in support of the group.

“This whole event shows the power of large communities of everyday people,” Huffman said. “Not only massive institutional and professional investors can participate in the stock market.”

The action on Reddit has helped the company reach new advertisers (its main revenue) and recover the expired ones, including those that recently stopped spending in the melee of the market, Huffman said. Reddit’s most recent, unprofitable numbers of users averaged 52 million daily in October. “We keep proving ourselves to advertisers,” he said. The company paid for a five-second ad that aired Sunday for Super Bowl LV.

San Francisco-based Reddit is known for its message boards on a multitude of topics, as well as for its “ask me anything” digital town halls with celebrities, politicians, and subject matter experts. The company was founded in 2005 and sold to Condé Nast a year later. The father of the magazine’s publisher, Advance Publications Inc., withdrew Reddit in 2011 and remains a shareholder, along with venture capital firm Andreessen Horowitz, Chinese internet conglomerate Tencent Holdings Ltd.

And others.

Social media companies have long been faced with the best way to moderate and preserve their content and are now faced with the possibility of lawmakers changing their way of doing business. One possibility is a revision of section 230 of the Communications Decency Act, which since 1996 has protected social media companies from potentially resulting civil liability from content that users post on platforms. A hearing in Congress on recent market riots has been scheduled for February 18; Huffman said Friday that he had not yet been asked to participate.

Reddit allows users to rate the entire content of the platform and relies on tens of thousands of unpaid users for the police. In contrast, larger social networking platforms rely primarily on algorithms and paid help to do this type of work.

Facebook,

the world’s largest social network said it had about 1.85 billion daily users in the December quarter, while Twitter recently said it had an average of 187 million daily users in the three months ended September. Both also rely on technology designed to help quickly identify rule-breakers, as does Reddit, albeit to a much lesser extent.

Facebook Inc. and Twitter Inc. have shown a growing interest in helping their users moderate the content that appears on their platforms. Facebook, which has struggled to contain calls for violence in the platform’s communities, is pushing volunteer group administrators to put more effort into reviewing members ’posts. Twitter is piloting a program called Birdwatch that encourages users to identify information in tweets they believe is misleading and to write notes that provide informative context.

“Community moderation can work, but only when there is good collaboration and communication between moderators and platforms,” said Joseph Seering, a Stanford University scholar who investigates voluntary moderation.

Reddit’s relationship with its volunteer moderators has not always been harmonious. Hundreds of communities closed in 2015 to protest the sudden dismissal of a popular Reddit employee. The company’s CEO at the time, Ellen Pao, apologized for how Reddit handled the matter and resigned shortly thereafter; Huffman took over.

Reddit in June banned “The_Donald,” a community dedicated to former President Donald Trump, who said moderators often ignored content that violated the platform’s rules.

“It was a political community dedicated to a president, so there’s a lot of weight,” Huffman said. “We gave them a lot of opportunities to be good Reddit citizens and they were never able to do that.”

WallStreetBets membership only quadrupled to 8.7 million subscribers this year. Huffman said the group, which includes 25 moderators on its forum, chose to temporarily make the forum private last month because they were overwhelmed and had technical issues.

While unpaid Reddit moderators are expected to ensure that members of their communities comply with company rules, they are free to create additional rules, which for some do not include oaths or jokes. The most common rule Reddit communities have adopted, Huffman stressed, is to be a civilian.

“When it’s written by your peers in the context of a community, it’s really powerful,” he said. “Think of it as the difference between your parents saying, be nice, and your friends are saying, be nice. The latter has a lot of weight. “

For the past four years, Dylan Kuehl has been the moderator of a Reddit community called “buildapc,” for people looking for help building their own teams. It has more than 3.6 million subscribers. “Reddit doesn’t provide us with any active input,” he said. “They don’t have anyone around to say, ‘Hey, you should ban this person or remove a message.’ It’s entirely up to us.”

Kuehl, a 31-year-old software engineer in Ontario, described the relationship between Reddit and its moderators as “symbiotic, almost a co-dependency.” He said, “They trust us to keep their platform clean … so they can keep the lights on, so we can continue to have our free platform to have our community.”

Huffman said Reddit launched an initiative in 2019 to get its volunteer moderators to quickly get help from more experienced volunteer moderators in times of crisis. He said Reddit has more work to do in this area, but believes the company’s approach is critical to its success and future, which could include raising additional funds and a public list of its actions. Reddit was valued at $ 3 billion after its last round of funding in February 2019, according to PitchBook, and has raised more than $ 550 million since its inception.

“I often think about the look of Reddit as a public company,” Huffman said. “We still have a lot to do, but we look forward to that.”

Write to Sarah E. Needleman to [email protected]