Internet forums are fundamentally not companies that can grow infinitely and where investors 10-100x their money. Digg was unprofitable. Tumblr was unprofitable. Twitter is unprofitable. Reddit is unprofitable. When VCs/investors ramp up the pressure the company has to change in ways the community doesn't like, and that is what normally kills it. Whether that happens with Reddit as well is TBD, but I can personally say that the quality of the forum has been steady declining over the last few years.
How does Facebook succeed making stupid amounts of money in this context? Is it the reality that they just have enough of data to make targeting effective enough?
Network effects mostly. If your relatives or friends are on facebook then you will either have to put up with it or miss out on social contacts. This does apply to other kinds of forums too to some extend but limited to a more abstract numbers game where the biggest forum is the place to be rather than more personal direct connections that you don't want to cut.
They serve up a ton of ads, which is also gradually driving people from Facebook. But if reddit served as many ads, it would be completely unusable.
Ads make the signal to noise ratio degrade. That works for spending a few minutes on FB, skimming to see what's up with friends or family, but not for reading long forum threads on reddit.
Facebook doesn't just serve ads. They have high quality identity and market data on their users that is very appealing to advertisers looking to spend their money on specific targets. I don't think reddit is currently able to supply advertisers with data of that quality. I assume forcing people to sign up with an email or use the app instead of the website are attempts at bridging that gap.
Facebook has best-in-class behavioral advertising tools, and can be used to create highly specific segments for ad targeting. You can sell pretty much anything on Facebook, so that attracts advertisers.
Reddit on the other hand has a bunch of anonymous users whose preferences are much harder to figure out.
Like I said, Facebook has better tools. Reddit is rock bottom when it comes to their ad product. They should have swallowed Twitter's business when their advertisers started fleeing, but they haven't.
You cannot use Facebook without creating an account and giving them a shit ton of data about yourself and your entire network. That data is what is used to show ads on all their properties and all over the internet. Reddit's user base on the other hand is mostly anonymous.
> Twitter is unprofitable. Reddit is unprofitable.
At least for Twitter and Reddit, these could be profitable. There's so much fucking garbage done on both platforms... remember the hexagon NFT profile pictures on Twitter or Reddit's NFT avatars? Who in their right mind other than cryptobros would/did buy these, and how much developer attention got sucked in by these projects? Reddit has around 2.000 employees, what are they doing all day long, given that most moderation is being done literally for free?
