Reddit CEO has a colorful nickname for troublemakers

Reddit has a time.

The online communities network was put in the spotlight this week after a group of investors on one of its forums – WallStreetBets – inspired a large group of retail investors to buy shares of GameStop, d ‘AMC and other heavily bypassed companies. Shares skyrocketed, causing brokerage firm Robinhood to temporarily restrict the purchase of options on certain stocks, although it reopened in limited capacity.

The Reddit community describes itself as “How 4chan found terminal illness in Bloomberg”. It’s a precarious description these days. Supporters of Donald Trump have used so-called “dark web” forums like 4chan to trace details of the Capitol Hill uprising that led to Trump’s impeachment and the deaths of five people. Given these events, the idea of ​​potentially disgruntled young people using a community to promote a crowd theme can rub people the wrong way. As CNN noted, “the posters revel in their rudeness; homophobic epithets are thrown out as terms of affection.”

To make sure Reddit communities don’t get out of hand, Reddit CEO and co-founder Steve Huffman and his team are monitoring “Daily Active S — heads,” Huffman said during a forum on audio startup Clubhouse Thursday.

Huffman described “DAS” as actors who prevent other Redditors from benefiting from their experience. As the CEO of a social media company, Huffman has faced a balance between censorship and free speech, like Twitter’s Jack Dorsey and Facebook’s Mark Zuckerberg. When it comes to these users, Reddit gives them plenty of warnings, but if they don’t reduce their language or engage in threats or bullying, Reddit ultimately removes them.

Then there are whole groups of people who can be problematic. Huffman said closing a forum – also called a subreddit – came “with a heavy heart.” He described giving the “r / The_Donald” subreddit, where attendees expressed support for Trump’s rhetoric and policies, plenty of chances to clean up their interactions with others – including Reddit employees. Reddit finally shut down the group on June 29, 2020, about five years after its formation.

Reddit makes its money mainly from advertising. CNBC reported in 2018 that Reddit generated around $ 100 million in revenue. Reddit also sells Reddit Coins, its digital currency to reward particular posts with trophies, marking their excellence. Reddit also sells an ad-free Premium Reddit product for $ 5.99 / month.

Reddit has raised around $ 550 million in funding, most recently raising $ 300 million in a February 2019 Series D round led by Chinese Tencent for a valuation of $ 3 billion.

Huffman, Alexis Ohanian (now married to tennis star Serena Williams) and Aaron Swartz, who died aged 26 in 2013, started Reddit in 2005 with the support of Y! Combinator founder Paul Graham. The company’s original intention was to function as the first page of the Internet.

Since then, Reddit has become synonymous with the free exchange of ideas and niche communities around video games, sports, politics, and finance. Reddit allows its users to be anonymous, which can lead to more honest – but also rude, communication. The site also became famous for its “AMAs” or “Ask Me Anythings”, where experts and celebrities answered users’ questions. President Barack Obama made one in 2012.

Ohanian told CNBC this week that he sees the grouping of people in Reddit’s “WallStreetBets” as a victory for individuals over financial institutions, which have long dictated investment policy.

“It’s a chance for Joe and Jane America – the retail buyers of stocks – to pull back and push back these hedge funds,” Ohanian told CNBC’s Squawk Box. “It’s become something much bigger. It’s very personal for a lot of people. It’s a pivotal moment. These communities are a by-product of the connected Internet. Whether it’s a platform or another is the new normal. “

In 2006, Conde Nast acquired Reddit for $ 10 million. Huffman and Ohanian become millionaires. Huffman remained there until 2009, when he stepped down as interim CEO.

The two co-founders eventually returned to Reddit after Conde Nast split the company, with parent company Advance Communications remaining the majority shareholders. Huffman returned as CEO in 2015. Maintaining Reddit’s reputation as an open communication forum has become especially important from a brand perspective as other social media sites, such as Facebook and Twitter , censored users (including Trump) for inciting violence or proliferation of hate speech.

While Reddit has not announced its intention to go public. whether through a deal with a Special Purpose Acquisition Company (SPAC) or an Initial Public Offering (IPO), its popularity as of this week may lead to an increase in the number of users – and possibly advertising dollars.

Still, public investors should feel comfortable with a company that hosts communities with enough “Daily Active S — heads” for the CEO to have a name for them.

WATCH: “ It’s a radical change ” – Alexis Ohanian, Reddit co-founder on WallStreetBets

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