Asklemmy

Because they realize they can get away with pretty much anything.

The tech markets have tightened.

To take Reddit’s case: so far, they could raise money at increasing valuation, and that’s how they’d fund their operations without having to have solid monetization. Now that all valuations are down including theirs, they can’t raise anything anymore, leaving them with four (non-exclusive) choices: running out of money soon and closing shop, exiting as fast as possible to get capital injection that way, letting go of most of their staff quickly in order to get leaner, or finding aggressive ways to monetize shortly.

I think Reddit’s monetization situation was grim enough that they’re making precipitated moves towards all the last 3 options, in order not to pick option 1 and die soon. For having been a part of it, a startup looking to exit will choose some very specific metrics that they’re choosing to market their exit on, and then they’ll make all their subsequent moves based on ruthlessly optimizing for those metrics alone. Since those metrics can be way different from the ones the company was using to raise money so far, that by itself can turn a company’s ethos on its head.

I think that’s what we’re seeing across the board in tech companies; except Twitter, which was a rare case of being driven by political calendar, and one person’s political goals. The acquisition agreement was signed just before the markets tightened, and in fact, Musk tried hard to wiggle himself out of it when the market started tightening, because that kind of wasteful ownership doesn’t make sense in the new climate. But this is really specific, and I believe the timing is a coincidence; unlike all the other ones.

In the case of reddit, I've heard a theory that the company's planning to go public, and so the API changes were designed to make the platform look more appealing to shareholders (no more 3rd party apps blocking ad revenue).

They are trying to squeeze as much money out of their platforms as possible, regardless of the fact that it's at the expense of users and will downgrade users experiences.

Check out Cory Doctorow's post on a term he coined called enshittification. Good primer to some of the same patterns we are seeing.

I believe there is another comment that breaks down a supposition for Reddit's enshittificationw, too, in this thread.

Cory Doctorow termed it "Enshittification", and wrote about the process here: https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys

Rabbits

Interest rates go up. Quantitative Easing go down.

They might have to play with real money lol

capitalism — they want more money

Deleted.

Rabbits

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.

Dr. Capitalism, or How I listened to stop worrying and love the dollar.

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.

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.

I'm wondering if it's a domino effect. Now that one major company made an announcement that fucks over their users, they're all doing it. We even now have YouTube cracking down on Adblockers. The Golden Era is coming to an end imo

Check out Cory Doctorow's post on a term he coined called enshittification.

Have you heard of the story of the Geese that laid Golden Eggs? Yes, it's the same story here.

I wonder if restricting API access might be related to the explosion of GPT where ML companies need training data and they've been sucking it up from everywhere they can. Reddit and Twitter realized that they could charge these companies for access instead and hence all of a sudden API access costs money.

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.