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amartz

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hubskier for: 3189 days

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amartz  ·  3189 days ago  ·  link  ·    ·  parent  ·  post: The social aggregator is a terrible business model.

It's good to see this conversation happening right out the gate. One of the issues over at reddit is the disconnect between how many of the users interpret the site and how the owners do. Social aggregators are businesses, not benevolent platforms for conversation. Reddit is 10 years old, and I would be shocked if it has turned a dime of profit, as its expenses likely far exceed its revenues. That means investors have only ever realized returns through M&A, and a company can only be sold and acquired so many times before the money loses faith. Just look at the crumbling valuation of Digg over the past 5 years.

Maybe social aggregators should focus on driving revenues directly, then. Maybe they ought to be loss-leaders in larger media asset portfolios. They create value somewhere, but it's mostly through shooting pageviews over to other sites - sites backed by different shareholders. So perhaps sites like reddit and hubski are destined to be parts of larger media portfolios that provide a bump to the other assets without focusing on cumbersome direct revenue features. Of course, the risk there is that the portfolio owner will likely be tempted to promote the content of affiliated media assets - a move that would surely erode the confidence of the community.