Reddit has signed a licensing agreement with Google that will see it hand over content from the popular social media site to train the tech giant’s artificial intelligence models, a source familiar with the deal said.
The deal with Alphabet Inc.’s Google is worth about $60 million a year, one of the people said.
The length of the agreement and what content the San Francisco-based company will provide were not disclosed.
The deal highlights how Reddit, which is preparing for a long-awaited initial public offering, is looking to generate new revenue amid fierce competition for ad dollars from companies such as TikTok and Facebook parent Meta. I have to.
Representatives for Reddit and Google did not immediately respond to The Post’s requests for comment.
bloomberg We previously reported on Reddit’s content deal without naming the buyer, noting that the San Francisco-based networking platform told potential buyers in an unfiled IPO that it had signed a deal.
The agreement could serve as a model for similar deals in the future, anonymous sources told Bloomberg.
The deal with Google is the first one with a major AI company that was first reported on Reddit.
This comes less than a year after Reddit implemented a paid model for third-party apps, or application programming interfaces (APIs). This will allow monthly users to customize their Reddit experience by personalizing their display theme, changing how they upvote, and more. Post – Prevent your data from being collected and shared.
Rather than Reddit having to pay the costs of operating the API, the API itself now has to pay the costs. CEO Steve Huffman told The New York Times at the time that the move was taken to ensure Reddit didn’t continue to expose all of its “valuable” data. For free.
The move upset some users who rely on third-party apps to access Reddit, with nearly 8,000 subreddits’ forms going dark for 48 hours in protest of the new pricing policy.
At the time, Reddit’s moderators, who work as unpaid volunteers and do tasks such as setting community rules and keeping threads on topic, asked Reddit administrators how much they needed to “MOD” in order to run the site. He said he wants people to be aware of how dependent they are and will continue to do so. It attracts users’ attention by negatively impacting site traffic.
Reddit will still generate more than $800 million in revenue in 2023, a 20% increase from the previous year, a person familiar with the company’s finances told Bloomberg.
The company generates revenue primarily through advertising.
In April, Reddit introduced a $5.99 monthly subscription price that gives users access to premium content, but the initiative has not yet turned a profit, Huffman said in a Reddit post.
The move to profit from AI could help Reddit capitalize on investor enthusiasm for the technology, boosting its IPO, Bloomberg reported.
The onset of market volatility, which has shut down the IPO market for much of the past two years, also played a role in delaying plans.
But Reddit plans to file for a high-profile IPO this week, which will coincide with its debut and reveal financial details to potential investors for the first time.
Two people familiar with the matter said the filing could be available as early as Thursday.
Co-founded in 2005 by prolific investor Alexis Ohanian and University of Virginia roommate and web developer Steve Huffman, the company was valued at nearly $10 billion in a 2021 funding round.
The company aims to sell about 10% of its shares, Reuters previously reported.
Reddit’s stock market launch marks the first IPO of a major social media company since Pinterest went public in 2019.
According to , Reddit will route approximately 850 million monthly active users in 2023, surpassing Pinterest, Snapchat, and LinkedIn. App business.
It has also become popular for driving the rise of dozens of “meme stocks.”
Perhaps the most infamous so-called meme stock is GameStop. The film, which was the subject of the recently released film Dumb Money, details how the video game retailer’s rumors in Reddit’s r/WallStreetBets discussion thread helped the video game retailer grow. has been done. It is one of the most widely shorted American companies.
AMC Entertainment’s stock price also soared following a meme stock rally fueled by the same forum on Reddit. There, users shared countless posts supporting the movie theater chain as its stock price ended above 100% in mid-2021.
with post wire
