Reddit throughout the years: Its rise to prominence, recent revolts and IPO plans

Published

2 years ago

July 30, 2023

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Reddit, home to cute cat pictures, investment advice, niche hobby discussions, celebrity interviews, edgy memes, wholesome memes and everything in between, has been facilitating discussions on the internet since 2005. The site has about 57 million daily active users who post and consume news, memes, questions and even stock tips that can roil markets.

The company filed for an initial public offering at the end of 2021. As it prepares to go public, it’s looking to turn a profit for the first time. The company is charging for access to its application programming interface, or API. The price hikes have led some beloved third-party Reddit apps such as Apollo to shut down, instigating an uproar among the website’s community of volunteer moderators, who often rely on third-party apps to run the site’s 100,000+ discussion communities, called subreddits.

Despite extensive protests in which thousands of moderators took their communities private, the API pricing changes took effect July 1 as planned. Under pressure from Reddit admins, nearly all communities have reopened. But tensions remain high, and some say that if Reddit doesn’t rebuild trust, its most passionate users will go elsewhere.

“Reddit is nothing without those communities. They need us far more than we need them,” said David DeWald, a moderator of the r/Arcade1up subreddit and a community manager for the telecommunications company Ciena.

The rise of Reddit

When Reddit co-founders Alexis Ohanian and Steve Huffman were in their senior year at the University of Virginia, startup accelerator Y Combinator was just getting off the ground. The two had met founder Paul Graham at a talk, and he suggested that the recent graduates build what he called “the front page of the Internet.” Ohanian and Huffman jumped at the chance. Y Combinator invested just $12,000 in 2005, and Reddit officially became a part of its first batch of companies.

“For the first probably like month, month and a half, a good number of the folks posting were just me and Steve under usernames that we just invented from like objects in the room, just random stuff just so that it would look like there was some activity,” Ohanian said.

Reddit founders Alexis Ohanian (L) and Steve Huffman (R)

But real user activity picked up, and just 16 months after its founding, Reddit was acquired for $10 million by Condé Nast. By 2010, co-founders Ohanian and Huffman were no longer involved in day-to-day operations, but traffic was booming. In 2011, Reddit was spun out as an independent company, operating as a subsidiary of Condé Nast’s owner, Advance Publications.

“I think it was fashionable back then to want to just grow and Facebook had proven out so well that if you focus on growth and then have a critical mass of users, you could make money,” Ohanian said.

On the one hand, Reddit’s niche communities were ideal places for target advertising, but the company’s permissive attitude toward questionable content also posed a problem.

“Reddit is kind of a perfect environment for advertising because the communities can get so specific and so passionate about whatever it is that they’re discussing,” said Debra Aho Williamson, principal analyst at Insider Intelligence. “But Reddit has had challenges over the years with hate speech and other things that are maybe not brand-friendly.”

Ohanian rejoined Reddit as executive chairman in 2014 and Huffman rejoined as CEO the next year. This time around, Ohanian said, he wanted to reign in some of the site’s more toxic subcultures. In 2015, a new anti-harassment policy led to the banning of some hateful communities, but certainly not all.

Then, in the wake of George Floyd’s murder in 2020, Ohanian resigned from the company’s board, urging Reddit to replace him with a Black candidate, which the company honored.

“I hoped that Reddit would finally get a hate policy so that we could ban those thousands of hate communities that were up, which happened, you know, a few weeks after I resigned,” Ohanian said. Reddit ultimately banned about 2,000 subreddits, including r/The_Donald, r/ChapoTrapHouse and r/gendercritical.

With the world stuck inside during the Covid-19 pandemic, engagement shot up. In the beginning of 2021, Reddit made headlines when users in the subreddit r/wallstreetbets organized a short squeeze on GameStop, the struggling video game retailer. Subsequent so-called “meme stocks” such as AMC kept Reddit in the news for months. Advertising was booming when the company filed for an IPO at the end of the year.

API pricing changes

Now, Reddit wants to turn a profit. With companies such as OpenAI and Google scraping the internet to train large language models, Reddit wants them to pay for its data. Huffman announced in April that Reddit would start charging for access to its API, the gateway through which companies can download all of Reddit’s user-generated content.

But it’s not just tech giants who use Reddit’s API. Many popular third-party mobile apps and moderator tools also rely on API access, which was previously free. These third-party apps are largely just alternatives to Reddit’s official mobile app, which didn’t even exist until 2016. But when developers learned about the new pricing structure at the end of May, many realized they couldn’t afford it.

“Most companies, whenever they have significant API changes, you know, they give anywhere from like three to sometimes like 15 months for developers to acclimate to these big changes,” said Dac Croach, a moderator of the r/Gaming subreddit, now the third-largest community on the site. “And with Reddit kind of coming out of the gate and saying, you know, you have 30 days to figure this out […] I mean, that is an impossible task for many of those third-party developers.”

The developer of Apollo said it would cost him over $20 million per year to operate given the new pricing structure. Apollo shut down, along with other popular third-party apps such as rif is fun, Reddplanet and Sync, a blow to their loyal users who said they have sleeker user interfaces and more features than the official Reddit app.

Jakub Porzycki | Getty Images

The pricing changes caused a particular uproar in a subreddit for blind users, who relied upon many of the third-party apps’ accessibility features. Blind moderators claim it’s very difficult to moderate on mobile using Reddit’s app, something Reddit says it’s currently working to improve.

In total, over 8,000 subreddits participated in a sitewide blackout from June 12 to June 14 to protest the changes. Many communities stayed closed much longer, while others labeled themselves “Not safe for work,” automatically making them ineligible spaces for advertising.

While most communities have returned to business as usual, there are some notable exceptions. For example, the r/pics and r/gifs subreddits are now limited to featuring pics and gifs of comedian John Oliver. The moderators of the popular Ask Me Anything subreddit said they will no longer organize interviews with celebrities and other high-profile figures, which has long been a major driver of engagement.

“They’re not burning things down. They’re saying, hey, you know, you didn’t listen to me then, can you listen to me now?” said Croach.

Reddit is rolling out several new moderator tools for its native app, but the company’s overall response has left many moderators frustrated. In an interview with NBC News, Huffman compared moderators with “landed gentry,” saying that the control they have over the communities they moderate is undemocratic.

Now, as Reddit marches toward an IPO, the tech world is watching to see how these tensions play out.

“Everyone in this situation is passionate for the success of Reddit. Reddit needs to realize that passion is what’s driving all of this anger,” said DeWald of the r/Arcade1up subreddit. “They need to work with us and work with other moderators and work with the app developers to find a solution that’s better for everyone, including Reddit, because Reddit needs us to be there.”

Watch the video to learn more about the rise of Reddit, and how the recent protests could shape the company’s future.

Technology

Week in review: Stocks hit records on inflation data, earnings — plus, we started a new name

Published

10 hours ago

October 25, 2025

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Week in review: Stocks hit records on inflation data, earnings — plus, we started a new name

Technology

AI spending is boosting the economy, but many businesses are in survival mode

Published

14 hours ago

October 25, 2025

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AI spending is boosting the economy, but many businesses are in survival mode

Cameron Pappas, owner of Norton’s Florist

Norton’s

For Cameron Pappas, owner of Norton’s Florist in Birmingham, Alabama, the artificial intelligence boom is a world away.

While companies like Nvidia, Alphabet and Broadcom are lifting the stock market to fresh highs and bolstering GDP, Pappas is experiencing what’s happening in the real economy, one that’s far removed from Wall Street and Silicon Valley.

Small businesses like Norton’s, and companies of all sizes in retail, construction and hospitality, are struggling from higher costs brought by the Trump administration’s sweeping tariffs, and as downbeat consumers reduce their spending.

“We’ve just got an eagle eye on all of our costs,” Pappas, 36, told CNBC in an interview.

Norton’s generated $4 million in revenue last year, selling flowers, plants and gifts to locals. To avoid raising prices, which could cause customers to flee, Pappas has been forced to get creative, reworking some of his designs.

“If a bouquet has 25 stems in it, if you reduce that by three to four stems, then you’re able to keep the price the same,” Pappas said. “It’s really forced us to focus on that and to make sure that we’re pricing things the best that we possibly can.”

Pappas’ story and many like it are being masked in the macro data by the power of AI. In the first half of the year, AI-related capital expenditures contributed to 1.1% of GDP growth, according to a September report from JPMorgan Chase. That spending outpaced the U.S. consumer “as an engine of expansion,” the report said.

Total U.S. GDP increased at an annual rate of 3.8% during the second quarter of 2025 after falling 0.5% in the first quarter, the Commerce Department said.

U.S. manufacturing spending has contracted for seven straight months, according to the Institute for Supply Management. And construction spending has been flat to down, due to high interest rates and rising costs. Cushman & Wakefield said in a report this month that total project costs for construction in the fourth quarter will be up 4.6% from a year earlier because of tariffs on building materials.

The stock market shows a similar disconnect between AI and everybody else.

Nvidia CEO Jensen Huang delivers the keynote for the Nvidia GPU Technology Conference (GTC) at the SAP Center in San Jose, California, U.S. March 18, 2025.

Brittany Hosea-Small | Reuters

Eight tech companies are valued at $1 trillion or more and, to varying degrees, are all tied to AI. Those companies — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Tesla and Broadcom — make up about 37% of the S&P 500. Nvidia, with a $4.5 trillion market cap, accounts for over 7% of the benchmark’s value by itself.

Investors are giddy about the massive investments they’re seeing in AI infrastructure. Broadcom shares are up more than 50% this year after more than doubling in each of the prior two years, while Nvidia and Alphabet have jumped almost 40% in 2025.

That explains why the S&P 500 and Nasdaq are up 15% and 20%, respectively, reaching record highs on Friday, even as the government shutdown continues to cause economic angst.

Meanwhile, the S&P 500 subgroups that include consumer discretionary and consumer staples companies have increased by less than 5% year to date.

The latest troubling sign in the consumer market came on Thursday, when Target said it’s cutting 1,800 corporate jobs — the retailer’s first major round of layoffs in a decade. Target shares have plunged 30% this year.

“I think the message that the AI economy is sort of driving up the GDP numbers is a correct one,” Arun Sundararajan, a professor at New York University’s Stern School of Business, told CNBC in an interview. “There may be weakness in the rest of the economy, or not weakness, but there may be more modest growth.”

Investors will hear all about AI in the coming days, the busiest stretch of the quarter for tech earnings, and will be listening closely for additional guidance on capital expenditures. Meta, Microsoft and Alphabet report on Wednesday, followed by Apple and Amazon on Thursday.

Stock Chart IconStock chart icon

Nvidia’s stock over the last year.

Last month, Nvidia announced a $100 billion investment in OpenAI, a startup valued at $500 billion. The capital will help OpenAI deploy at least 10 gigawatts of Nvidia systems, which is roughly equivalent to the annual power consumption of 8 million U.S. households.

Shares of Advanced Micro Devices have doubled this year and soared more than 20% earlier this month after the chipmaker announced a deal with OpenAI, while Oracle has been on a tear of late due to its ties to OpenAI and the broader infrastructure buildouts.

“Are we sort of inflating the economy now, thereby setting ourselves up for a crash in the future?” Sundararajan said. He added that he’s not seeing signs that demand for AI infrastructure will slow anytime soon.

‘Tariff price management’

When it comes to local businesses, most only know about the AI gold rush from the news headlines. One in four small business owners are stuck in “survival mode” as they contend with challenges like rising costs and tariffs, according to a September KeyBank Survey. It’s a segment of the economy that routinely accounts for about 40% of the nation’s GDP.

Pappas’ flower shop was founded in 1921, and purchased by his dad in 2002. The business has survived the Great Depression, World War II and the Covid pandemic. Pappas said his father, who died in 2022, reminded him that these periods were “just another season” for Norton’s, and that such challenges come with the territory.

But Trump’s tariffs have created a whole new set of constraints, as roughly 80% of all cut flowers in the U.S. are imported from countries like Colombia and Ecuador, according to the U.S. Department of Agriculture.

More demand than supply gives companies an edge, Jim Cramer says

Published

1 day ago

October 24, 2025

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More demand than supply gives companies an edge, Jim Cramer says

“Supply constrained,” are the two of the most important words CNBC’s Jim Cramer said he’s heard so far during earnings season and explained why this dynamic is favorable for companies.

“When you’re supplied constrained, you have the ability to raise prices, and that’s the holy grail in any industry,” he said.

Intel‘s strong earnings results were in part because of more demand than supply, Cramer suggested. He noted that the company’s CFO, David Zinsner, said the semiconductor maker is supply constrained for a number of products, and that “industry supply has tightened materially.”

Along with Intel, other tech names that are also supply constrained and performing well on the market include Micron, AMD and Nvidia, Cramer continued.

These companies don’t have enough product in part because the storage needs of artificial intelligence are incredible high, Cramer said. He added that he thinks demand has overwhelmed supply because semiconductor capital equipment companies didn’t manufacture enough of their own machines as they simply didn’t anticipate such a volume of orders.

Outside of tech, Cramer said he thinks airplane maker Boeing and energy company GE Vernova are also supply constrained, adding that he thinks the former will say it’s short on most of its planes when it reports earnings next week. GE Vernova is supply constrained with its power equipment, like turbines that burn natural gas, he continued, which is the primary energy source for the ever-growing crop of data centers.

GE Vernova and Boeing are also set to be winners because they make big-ticket items that other countries can buy from the U.S. to help close the trade deficit, Cramer added.

“In the end, we have more demand than supply in a host of industries and that’s the ticket for good stock performance,” he said. “I don’t see that changing any time soon.”