Reddit CEO Steve Huffman Takes on Big Tech for AI and Ad $$

While the big question everyone wants answered about Reddit these days is whether there’s an initial public offering in the works , there’s a lot more the industry is wondering about this unique hub for digital conversation. One of its co founders, Steve Huffman, returned to run Reddit eight years ago, and in that time has presided over a period of dramatic, if somewhat turbulent, evolution for the platform.

He sat down with Variety Intelligence Platform president and chief media analyst Andrew Wallenstein on Jan. 10 at the Variety Entertainment Summit at CES in Las Vegas to discuss how Reddit holds its own for ad dollars against the tech juggernauts that also want to mine the company’s intellectual property for AI training purposes.

Andrew Wallenstein: May I be so bold as to ask if we’ll be seeing an IPO anytime soon? Steve Huffman: I can’t talk about that topic. I have a PR proofed sentence: We are working toward building a sustainable business. Wallenstein: Alright, well, let’s talk about that sustainable business, starting with advertising.

Look at this chart (see below). It’s saturated with the biggest digital players worldwide. How are you able to differentiate what you’ve got to compete with the Metas and Alphabets of the world? Huffman: First, I think there’s a bug on your slide — Reddit is misspelled as “Other.” Wallenstein: You’re all that gray?! [Joking.] Huffman: Our business is growing nicely.

We’re outgrowing the market right now, which we’d expect to do. Reddit is unique in a number of ways. I think it’s important to understand that Reddit is not social media. It is communities. Brands can connect the communities of people who love those brands on Reddit in a different way, and so it’s also a fair amount of what we would call unduplicated reach — people who are on Reddit who aren’t on other platforms.

Wallenstein: You guys were out with some research this week talking about the power of recommendations. Huffman: The nature of Reddit is it’s a place where people go for recommendations or advice. Sometimes it’s life advice, but many times it’s actually products. In fact, a lot of Reddit is people talking about stuff they’re going to buy.

Every second, two people ask for a product’s recommendation on Reddit, and they get, on average, 19 responses. I just went through this: I bought an E ink tablet, so I was deciding which one to buy for notetaking. And Reddit has tons of communities for that stuff. That sort of advice, just from other consumers, is really special and valuable.

I ended up with the Supernote, for what it’s worth. Wallenstein: This recommendation centric strategy ... how does that play in this world we’re in now, in the end of the cookie era? Huffman: On Reddit, we target with first party data. We see your behavior, and we use that so we don’t have to cookie you all over the internet and watch what you’re browsing and reading and searching for and all those things.

It’s just your explicitly expressed interests on Reddit. And so I think the cookie transition the industry is going to go through presents some challenges, but the platforms that will do best will be the ones that rely on first party data, when we’re one of those. Wallenstein: The data that is in these Reddit communities is a goldmine, which is great because the tech giants want in on that.

But it also is something of a control issue with these Redditors, so how do you navigate the balance there between what you can license to tech giants but also placate the Redditors? Huffman: Yeah, there’s a balance there. We’re learning how to walk that line — and where the line is. Reddit is a valuable source of data for training potentially, and we’re open to licensing it — for people, you know, for that purpose.

For non commercial use, it’s very straightforward. You can apply to Reddit and just get access to that sort of thing. For commercial use, we’d like to have some sort of arrangement or deal so we're not just subsidizing some of the largest companies on Earth. But for our user point of view, I think, that openness and that commitment, the privacy and making sure users are in control of their own identity — that’s kind of the bedrock of that.

So no matter, you know, whether your data is on Reddit or, for example, on another platform, like a search engine, it’s all kind of transparent where it’s going and what it’s being used for. Wallenstein: I would imagine, then, that you must be watching the New York Times versus OpenAI case with some interest.

Is it relevant to the situation at Reddit? Huffman: We are watching that case, of course. Reddit is one of the largest corpuses of human like authentic human conversation. And it’s not available for free, you know, to train these models. And so we’ll work through that with all of these companies, right? Whether they want to use Reddit data or not.

But I think many IP holders share our view there, which is you have this IP, whether you’re us or The New York Times or another big IP holder, and the intention is never to just give that information away wholesale for free so somebody else can use it for their gain. I do think the industry will find a balance here over time.

I think some people in the space are being more cooperative than others. But we’re right in the thick of it. I think we all are, and we’re all taking different approaches..