Reddit's AI Licensing Revenue and Ad Business Boom
Reddit COO Jen Wong revealed that content licensing agreements now account for roughly 10% of Reddit's total revenue, a significant portion for a business of its size. Reddit has partnered with Google and OpenAI for content licensing, focusing on collaborations with AI developers who adhere to their user privacy and brand representation terms. While AI licensing is a valuable revenue stream, advertising remains the core driver. Reddit's ad revenue surged 60% year-over-year in Q4 2024, fueled by new offerings like AMA Ads and Pro Trends, and investments in machine learning and AI to enhance ad targeting and user engagement. Reddit's daily active users are also growing, but the company hasn't yet achieved annual profitability, despite posting a profit in Q4.