Speaker 1: Read it out with its first earnings report as a
Speaker 1: public company, shares markedly higher seven percent. Let's bring in
Speaker 1: Reddit CEO Steve Huffman and Steve the core to gone
Speaker 1: forty eight per cent top line growth. You're doing well,
Speaker 1: the ad environment seems really good. But I actually want
Speaker 1: to start with the next big thing, and that seems
Speaker 1: to be the user economy. That seems to be your focus.
Speaker 1: Tell me about the user economy strategy.
Speaker 2: So, good morning, thanks for having me.
Speaker 3: So, the user economy is the family of products and
Speaker 3: features that we're building to facilitate transactions between users on
Speaker 3: the platform, so user to user, gifting user to use
Speaker 3: their subscription, user community, subscriptions, things like that.
Speaker 2: We think there's a ton of potential here.
Speaker 3: One of our sayings that Reddit is the only thing
Speaker 3: that scales with the users is users. And so look,
Speaker 3: the ads business is great and can scale pretty much
Speaker 3: infinitely from our point of view, but we'd love to
Speaker 3: have another business model to sit alongside it, and that's
Speaker 3: what the user economy.
Speaker 4: Is, Steve alongside. Also, the ad business that you say
Speaker 4: can infinitely scale has been AI and the selling of
Speaker 4: data and licensing to some of those big businesses that
Speaker 4: are creating large language models based upon the data that
Speaker 4: you license, Google being one of them. How infinite is
Speaker 4: that revenue stream? Because once the models are trained, how
Speaker 4: necessary is it to keep on licensing.
Speaker 2: So I think there's a couple of ways to look
Speaker 2: at this.
Speaker 3: First, the potential value here is I think quite large,
Speaker 3: and between us and other folks in the market, we're
Speaker 3: actually still developing that. You know, we're finding increasingly folks
Speaker 3: coming to Reddit, and I think what we're seeing overall
Speaker 3: big picture is in the AI era, where increasingly content
Speaker 3: online is written by machines, there's this increasing premium on content, perspectives,
Speaker 3: conversation that comes from real humans, and that's what Reddit provides.
Speaker 3: So so far we've done one kind of major content
Speaker 3: licensing deal with Google, but we're talking to others as well.
Speaker 3: But your question about is is it a one time
Speaker 3: thing or ongoing? I think what's really important here is
Speaker 3: folks want real time access to up to date information,
Speaker 3: conversation perspectives.
Speaker 2: Right.
Speaker 3: Imagine a search engine that stopped indexing in twenty twenty one,
Speaker 3: it wouldn't be very helpful, and so I think that
Speaker 3: real time feed is really important.
Speaker 1: Steve, you took the interesting step to ask redditors and
Speaker 1: particularly redditors who are investors in the IPO, to submit questions,
Speaker 1: and those some of which you answered on the call
Speaker 1: and some of which you'll follow up in video form.
Speaker 1: We're showing one of them now, which is what is
Speaker 1: the justification for having one billion dollars in working capital? Now?
Speaker 1: I want to take that question and apply it to AI.
Speaker 1: Data licensing is a revenue generation tool for you. But
Speaker 1: on the technology side, might we see some M and
Speaker 1: A that answers that question from your reddit A community,
Speaker 1: but also helps us understand a bit more like what
Speaker 1: are you guys going to do to increase competence to
Speaker 1: increase the technology offering on AI?
Speaker 2: Sure, we'll look.
Speaker 3: Our first priority with the cash is to invest in
Speaker 3: the business, so to continue to develop the core Reddit product,
Speaker 3: the user economy, which we discussed, the developer platform, our
Speaker 3: AI efforts, all of those things. Our second priority would
Speaker 3: be M and A And so you know, we're always
Speaker 3: I think looking in the market for teams and technology
Speaker 3: that can really kind of help advance our initiatives, and
Speaker 3: right as you allude to, I think there's just a
Speaker 3: tremendous opportunity in AI in search, both to make our
Speaker 3: core product better and potentially to expand it as well.
Speaker 4: Let's talk about expansion and particularly internationally, because there's much
Speaker 4: talk about how you're basically translating able to bring what
Speaker 4: is all the reviews, the content, the discussion groups, not
Speaker 4: just to those that are writing and speaking in the
Speaker 4: English language, but in French and European countries. How is
Speaker 4: this likely to be enabled by AI but also add
Speaker 4: to the scale of international growth.
Speaker 3: Well, this is really exciting, Like, not that long ago,
Speaker 3: we didn't have the capability of translating our content at
Speaker 3: human quality, but with today's large language models, we can
Speaker 3: do that, and so we can translate our what is
Speaker 3: today our mostly English corpus into just about any language.
Speaker 3: And so we're doing that in French right now and
Speaker 3: testing that in France, and it's going very well, and
Speaker 3: so almost immediately French speakers can see the entire Reddit
Speaker 3: corpus or consume their entire redit corpus in English. And
Speaker 3: a lot of reddits content is universal, right, it's just
Speaker 3: people talking about life. But even the content that is
Speaker 3: maybe regionally specific to America, I think it's still really
Speaker 3: interesting to read and vice versa, and so I'm really
Speaker 3: excited at this idea that we can fulfill the promise
Speaker 3: of the Internet, which has allow people around the world,
Speaker 3: in different countries and different cultures to communicate in their
Speaker 3: native language.
Speaker 1: For our Bloomberg television and radio audience worldwide, we're speaking
Speaker 1: to the Reddit CEO, Steve Huffman, and Steve things are
Speaker 1: going well right now. It seems one of the technology
Speaker 1: changes at the start of this year and even before that,
Speaker 1: was that Google started applying its work in large language
Speaker 1: models and AI to its search engine. And there is
Speaker 1: a school of thoughts that Reddit was a beneficiary of
Speaker 1: that that just within search, Reddit becomes more commonplace, higher
Speaker 1: up the results that are given. Can you give us
Speaker 1: any sort of granularity on how that's helping you with
Speaker 1: growing the redditor base and keeping the redditor base.
Speaker 2: Well, let's just take a step up for a second.
Speaker 3: Reddit has what people want, right, People have questions.
Speaker 2: They often go to Google with questions. Reddit has the
Speaker 2: best answers on the internet.
Speaker 3: They want advice, they want information, they want a sense
Speaker 3: of community and belonging. These are the things that Reddit
Speaker 3: provides and search engines like Google ten years ago, last year, today,
Speaker 3: tomorrow help people find that content on Reddit. They're looking
Speaker 3: for those answers, they're looking for those communities they're looking
Speaker 3: for And so I think I look at this as
Speaker 3: a natural evolution. Search engines are getting smarter, they're getting better,
Speaker 3: they're getting more effective, which means they're getting more effective
Speaker 3: at helping users find what they're looking for on Reddit,
Speaker 3: which of course benefits our platform, our business, and so
Speaker 3: I think these are all I think welcome evolutions. But
Speaker 3: red It's been a net beneficiary of search for a
Speaker 3: long time and I expect that to continue.
Speaker 4: How much have you been a net beneficiary of going public, Steve?
Speaker 4: How much did the IPO help draw people to the platform.
Speaker 4: How much was it a pr event do you think
Speaker 4: and actually boosted some of the community there.
Speaker 2: Well, look, I'm sure that's an aspect to it.
Speaker 3: You know, it's hard to say, and you know Reddit
Speaker 3: primarily grows through word of mouth anyway.
Speaker 2: You know, we don't really do consumer marketing, and.
Speaker 3: So I think anytime we're in the news that helps
Speaker 3: in the IPO with a lot of news. But look,
Speaker 3: the reason I was most excited about the IPO is
Speaker 3: that we are able to include our users as investors.
Speaker 3: Our users have this deep sense of ownership over Reddit.
Speaker 2: Right.
Speaker 3: They create the communities, they create the culture, they create
Speaker 3: all of the content, and for them to have the
Speaker 3: opportunity to be actual owners.
Speaker 2: That was our dream and that was one.
Speaker 3: Of the main reasons we went public in the first place.
Speaker 3: So that's actually what I'm most excited about.
Speaker 1: Steve is a kind of returning founder CEO of readit.
Speaker 1: What's your one personal goal for this year, something you
Speaker 1: want to achieve.
Speaker 2: Well, we mapped out two of them.
Speaker 3: We got the company public and I had my second kid,
Speaker 3: And so for the rest of this year, I want
Speaker 3: to deliver on some of the product initiatives that I've
Speaker 3: been very excited about, so developer platform, the user economy,
Speaker 3: the machine translation that we've discussed, and these are all
Speaker 3: things I think in the day to day building of
Speaker 3: Reddit that I'm very excited about.
Speaker 4: Steve, congrats, I'm the second kid. Reddit CEO Steve Hoffman,
Speaker 4: joyed to have you with us. Thank you.