Because they realize they can get away with pretty much anything.
this post was submitted on 30 Jun 2023
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Asklemmy
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Both Reddit and Twitter are losing a lot money. They want to squeeze their users for profit.
Money. It really is that simple.
Reddit wanted to kill third party apps because they have ad blocking features and don't show unwarranted sponsored posts. Reddit wants to serve users as much ads and sponsored content as possible, which was not really able to happen with third party apps.
When a company goes public it becomes something that needs to “appeal to the public”. It’s like when a movie wants to appeal to everyone. By doing so it ends up appealing to no one in particular and it’s a successful meh movie.
Going public then you have a committee of board members making decisions. And who’s going to be on a board? Bunch of rich people who only care about making it the best company for the public. Effectively ditching everything that makes a company risky or unique.
Going public can also be good cos you’ll have public money to invest in new and better tech or systems or acquisitions. So the future they have in mind seem to not include a lot of us. It’s a direction that’ll strip anything unique about reddit and become a successful meh platform
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Rabbits
The other issue to consider is MBAs. Or at least the MBA way of thinking, that "caring about customers" actually means "leaving money on the table." The relentless search for "business efficiency," evaluated in pure accounting terms, can easily lead to destroying the core business due to a lack of understanding of how the core business shows up on a P&L statement.
Any company with a MBA at the helm always seem to make poor choices. Look at the all the companies that have started switching back to engineers for leadership they've started making comebacks.
The companies want to make more money, and they have (what they think) a captive audience that will put up with the increase in costs. Pull off the bandaid all at once to maximize the probability that everyone will shrug and take it.
I feel like they all see the inevitability that AI will drastically change the money model very soon. And it will not be to their profit, so best make every penny they can right now is their mentality.
$$$ M O N E Y $$$
-- Mr Krabs
Cory Doctorow termed it "Enshittification", and wrote about the process here: https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys
I'm glad I read through the whole thing.
Bummed that I won't be winning a testicle 😰
I'm glad I read through the whole thing.
Bummed that I won't be winning a testicle 😰
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capitalism — they want more money
Interest rates go up. Quantitative Easing go down.
They might have to play with real money lol
This is it. For nearly 15 years money was basically free for tech companies. Banks don't pay anything, bonds don't pay anything, the stock market is overheated and investors are still looking for return. So if your tech company was already public you could borrow in the form of bank loans or bonds for dirt cheap and if it was still privately held you can get money from individual and corporate investors.
Now that the free money era is over a lot of companies have had to finally think about making a profit so that they can keep the lights on. This is why there have been tens of thousands laid off in the tech sector in the last year or so.
As far as Reddit goes I have no idea what they've been thinking. It seems like they've been spending money developing features nobody wants or needs: locally hosted images and video which have to cost a fortune, live chat, and NFTs, to name a few. They've got the ~20th most popular website in the world with millions of daily active users and they can't figure out how to make it profitable?
The API the third party applications used doesn't serve ads. All they had to do for a bump in revenue is to insert ads and require third party applications to display them or risk losing their API access. Users would grumble but it's a pretty reasonable ask. The fact that they didn't do this demonstrates to me that they don't think the money is in serving ads, they think it's in data mining and they can only get the data they want from the official app.
Deleted.
My idea is that they didn't/don't have a choice but to try something.
They are probably running out of money and no one is giving it to them in this econimical climate.
Maybe profitability, or at least drastic measures, is the request by investors (similary how IMF is "blackmailing" countries when they give them loan).
It might also be an experiment, planned or accidental to male profit of social networks after 20 years of investing.
It is a gamble, but cut has to be made at some point.
Dr. Capitalism, or How I listened to stop worrying and love the dollar.
Rabbits
The user bubble has popped now that investors started questioning why the fuck they’ve been investing huge amounts of money into companies that make no money just because they have lots of users. With that investment money drying up, these tech companies are desperate to start making a profit so they can survive and grow their value still.
TLDR: investment in unprofitable tech companies is drying up and companies that aren’t profitable are scrambling to make money.