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0 pointss1artibartfast3y ago0 comments

>And it would have been a deal: 6 months of opportunity cost upfront to then turn into real profit. Instead they are permanently lose the [possibly] majority of that opportunity when those users lose access to Reddit.

I dont think that is accurate. Reddit doesnt make 20M a year if they buy Apollo in this situation.

If something costs 20 million/yr to operate, buying it doesnt reduce that cost. You are just out 10M upfront and then 20M/yr.

The solution is not to buy it, but to make it stop.

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9 comments · 4 top-level

zamalek3y ago· 2 in thread

> Reddit doesnt make 20M a year if they buy Apollo in this situation.

They claim that they would.

s1artibartfastOP3y ago

No, they claim Apollo costs them 20M/yr (agreeably dubious). That doesnt mean Apollo can make 20M/yr if reddit owns it.

zamalek3y ago

Opportunity cost essentially means lost revenue. They (Reddit) aren't referring to server/egress/cloud/etc. costs. Eliminating lost revenue = new revenue.

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pooper3y ago· 1 in thread

This forces Reddit to say out loud that the reason they want to introduce payments is to make third party apps stop.

Reddit has to say that the pricing it has is reasonable which means that they have to say Apollo can earn (at least!) USD 20M a year. If Apollo can earn USD 20M a year, buying it for USD 10M is indeed a steal. Normally, if you think a company makes 20M a year, you have to pay at least x 5, so USD 100M to buy this money printing machine.

s1artibartfastOP3y ago

Claiming something costs you 20M/yr, doesn't mean that it can make 20M/yr.

>If Apollo can earn USD 20M a year, buying it for USD 10M is indeed a steal.

Not if you can get the same thing for doing nothing. Buy Apollo for 10M up front and make 20M/yr or dont buy Apollo and make 20M/yr. Does it really look like a steal when the alternative is free?

Dylan168073y ago· 1 in thread

They seem to think the 20 million is payable.

Even if they could only get a quarter of that from users, they'd be rolling in money after a year or two.

> and then 20M/yr

The servers don't cost anywhere near that much to run.

comprev3y ago

Unless you use AWS :-)

nikaspran3y ago· 1 in thread

According to the quotes by Reddit themselves, the 20M a year is opportunity cost, not actual cost.

s1artibartfastOP3y ago

agreed. Owning Apollo doesnt reduce the opportunity cost. They still lose 20M, but now they own Apollo.

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