Reddit Inc. RDDT has revealed plans to introduce new monetization features for developers on its platform. The move is expected to enable users to create and earn money directly on the site.
What Happened: During the company’s second-quarter earnings call, Reddit’s CEO Steve Huffman disclosed the company’s intention to introduce monetization features within Reddit’s developer platform. This would allow users to create and earn money directly on the platform.
“We’re working towards enabling monetization within the developer platform to empower our users to create and earn money on the platform this year,” Huffman stated during the call.
The developer platform, which is currently in public beta with a few hundred active developers, has shown promising results. Huffman highlighted examples of custom post types, such as scoreboards and stock tickers, being used in sports and investing communities on the site.
While specific details about the monetization features remain unclear, Huffman expressed enthusiasm about the potential for users to surprise the company with innovative applications.
Huffman tempered expectations for immediate large-scale implementation, stating, “I can’t promise scale or anything like that this year. But getting to that kind of end-to-end proof of concept will be, I think, a really important milestone.”
Why It Matters: Reddit’s move to enable monetization features for developers is part of a broader strategy to diversify revenue streams and enhance user engagement.
The announcement follows a series of significant financial updates from the company. In the second quarter, Reddit reported a 54% year-over-year increase in revenue, reaching $281.2 million, and a 51% rise in daily active users.
Reddit’s third-quarter revenue forecast surpassed Wall Street’s expectations, indicating a rebound in the digital ad market. However, the stock experienced a decline due to the upcoming end of the pre-IPO lockup for private investors and conservative quarterly forecasts.
Moreover, Reddit’s enhanced advertising tools have driven significant upside, as noted by JPMorgan analyst Doug Anmuth. The analyst emphasized the need for sustained execution and growth amid tougher competition in the online ad market.
Price Action: Reddit Inc. closed at $54.36 on Tuesday, down 4.31%. In after-hours trading, the stock continued to decline, falling by an additional 4.53%. However, year to date, Reddit Inc. has seen an overall increase of 7.77%, according to data from Benzinga Pro.
Read Next:
Image Via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
