The CEO of Reddit has a colorful nickname for the problems that cause problems

Reddit has a moment.

The online community network was the focus of attention this week after a group of investors on one of its forums – WallStreetBets – inspired a large group of retail investors to buy shares of GameStop, AMC and other short-circuited companies. Shares rose, prompting trading brokerage Robinhood to temporarily restrict the purchase of options in certain stocks, although it was reopened with limited capacity.

The Reddit community describes itself as “Like 4chan found a Bloomberg terminal illness.” This is a precarious description nowadays. Donald Trump supporters have used so-called “dark web” forums, such as 4chan, to plot details surrounding the Capitol Hill insurgency that led to Trump’s ouster and the deaths of five people. Given these events, the idea of ​​potentially dissatisfied young people using a community to push a mob-driven theme can rub people in the wrong way. As CNN noted, “Posters enjoy rudeness; homophobic epithets are discarded as terms of affection ”.

To make sure Reddit communities don’t get out of control, Reddit CEO and co-founder Steve Huffman and his team monitor the “Daily Active S — bosses,” Huffman said in a forum from the audio startup. Clubhouse Thursday.

Huffman described “DAS” as actors who prevent other Redditors from enjoying their experience. As CEO of a social media company, Huffman had to balance censorship with free speech, similar to Jack Dorsey on Twitter and Mark Zuckerberg on Facebook. When it comes to these users, Reddit gives them a lot of warnings, but if they don’t diminish their language or engage in threats or aggression, Reddit eventually eliminates them.

Then there are whole groups of people who can be problematic. Huffman said closing a forum – also called a subreddit – comes “with a heavy heart.” He described the subreddit “r / The_Donald”, where participants expressed support for Trump’s rhetoric and policies, many chances to clean up their interactions with others – including Reddit employees. Reddit finally pulled the plug of the group on June 29, 2020, about five years after its formation.

Reddit earns its money mainly from advertising. CNBC reported in 2018 that Reddit generated revenue of about $ 100 million. Reddit also sells Reddit coins, its digital currency to reward certain trophy posts, marking their excellence. Reddit also sells a Reddit Premium product with no ads for $ 5.99 / month.

Reddit raised about $ 550 million in funding, most recently raising $ 300 million in a February 2019 Series D round led by China Tencent at a $ 3 billion valuation.

Huffman, Alexis Ohanian (now married to tennis star Serena Williams) and Aaron Swartz, who passed away at the age of 26 in 2013, started Reddit in 2005 with the support of Y! Combiner founder Paul Graham. The initial intention of the company was to function as the first page of the Internet.

Since then, Reddit has become synonymous with the free exchange of ideas and niche communities around video games, sports, politics and finance. Reddit allows users to be anonymous, which can lead to more honest communication – but also more gross. The site has also become famous for “AMAs” or “Ask Me Anythings”, where experts and celebrities would take questions for users. President Barack Obama made one in 2012.

Ohanian told CNBC this week that he sees Reddit’s WallStreetBets group of people as a victory for individuals over financial institutions, which have long dictated investment policy.

“It’s a chance for Joe and Jane America – stock retailers – to come back and push back those hedge funds,” Ohanian told CNBC’s Squawk Box. “This has become something much bigger. It’s very personal for a lot of people. This is a fundamental moment. These communities are a byproduct of the connected internet. Whether it’s one platform or another, this is the new normal. “

In 2006, Conde Nast bought Reddit for $ 10 million. Huffman and Ohanian become millionaires. Huffman remained until 2009, when he left his position as acting CEO.

Both co-founders eventually returned to Reddit after Conde Nast gave up the company, with parent company Advance Communications remaining the majority shareholder. Huffman returned as CEO in 2015. Maintaining Reddit’s reputation as a forum for open communication has become particularly important from a branding perspective, as other social networking sites, such as Facebook and Twitter, have censored users (including Trump) for instigating violence or proliferation. hate speech.

While Reddit has not announced plans to go public. either through a business with a special purpose procurement company (SPAC) or through an initial public offering (IPO), its popularity this week could lead to an increase in users – and possibly advertising.

However, public investors should feel comfortable with a company that hosts communities with enough “Daily Active S — heads” for the CEO to have a name for them.

SEE: “This is a drastic change” – Reddit co-founder Alexis Ohanian on WallStreetBets

Nominations are open for 2021 CNBC Disruptor 50, a list of private start-ups that use cutting-edge technology to become the next generation of large public companies. send until Friday, February 12, at 15.00 EST.