Reddit has never turned a profit in nearly 20 years, but it just filed to go public anyway

The article in the reddit post you shared is misleading. According to the S1 filed with the SEC, spez’s current base pay is $450,000; in 2023 he got roughly $792,000 in performance-based bonuses. The rest of that 193 million is options.

Why would there be any fraud? His salary is approved by the board that represents the current shareholders.

It's also not particularly surprising on account of there being plenty of VC-subsidised companies that never turned a profit, had high salaries for their executives and then IPO'd.

If your question is moreso on the absurdities of capitalism, then that's another discussion entirely, but I feel it's important to note that this is nothing out of the ordinary.

CEO salaries?

You still have massive server costs. You have to maintain the massive dynamic comment database along with pictures now.

They are still paying for developers to make new things, both on the front ends and the back end.

Probably basically all operational expenses, with a minority being cloud expenditure and a majority being salaries for employees, if I had to guess.

I'm assuming that spez gets most of his pay in the form of stock options which doesn't really cost the company anything real.

There isn't off the shelf software to run things like Reddit, and the work to make that happen is pretty staggering. That isn't to say there isn't frivolous spending there - I have no idea.

Lemmy has been developed since 2019 and the software crumbled when network-wide users spiked into the ~75,000-ish monthly range when some vocal Reddit users sought greener pastures over the app/api issue last year. A lot of talented new developers contributed scalability fixes that were obvious to them (but not obvious to the main devs), and we now have the largest Lemmy server handling ~10,000 monthly users without crashing. The work that has gone into making Lemmy, an open-source Reddit alternative written in Rust (vroom vroom) handle the waning spike of Reddit users fleeing, was substantial. Look through the lemmy github issues discussions page and merged closed contributions/discussions for that journey. Those people were largely contributing time and expertise for nothing in return. Imagine paying a market rate to all of the people who contributed substantial time into the betterment of Lemmy. By the way, Reddit was open source: https://github.com/reddit-archive/reddit

Takeaways so far: this is a hard problem, even today with faster software and hardware - and Lemmy needed a diverse set of contributors to get its largest server stable at 10k monthly and ~50k across the network.

Reddit had 46,000,000 monthly active users in 2012, ~7 years after launch. Reddit has 330,000,000 monthly active users today. My guess is that Reddit employs a lot of smart software engineers that are needed to contribute solutions that allow the site to serve an ever-growing user count without major outages with new features rolled in. Meanwhile, the vast majority of Reddit users will never pay a thing to Reddit and it isn't a good platform to deliver advertising through.

My point: It is easy to gloss over the staggering amount of work, talent, and skill that goes into supporting a site that operates at this scale. Reddit is around the 10th largest site in the US (8th if you exclude search engines) and 12th globally excluding search engines.

Because they have. A ton - they paid Spez almost $200 million last year. But when you invest, spend, or pay out all of the money you get, on your tax sheet it says you didn't make any profit, because you don't have any excess money.

They didn't make any profit, meaning they did not make more money than it costs. It's not like they wouldn't make money (the advertisements in example), but its not enough to make a profit out of the business. But given the millions the CEO gets (if its true), then no wonder they can't make a profit, if CEO eats it all.

It is owned by companies that can afford for it to not be profitable, but with raising interest rates financing is more expensive so everyone is tightening purse strings. Not surprised they are doing the IPO now.

Because the Spez era has been marked by cutting off every avenue of revenue. Secret Santa? Gone. Ads? Not maturing enough. Mod tools? Never happened and created a boiling pot of user hostility that culminated in the API Pricing.

Twitter has taught me that nowadays people are too adaptable, 90% of people will stick with Reddit no matter what they do.