ACT I — THE DEAL AND THE IPO
February 22 – March 21, 2024 · "We're excited to partner to make it even easier for people to benefit from that useful information."
The 27-Day Sequence
There are business decisions that unfold over quarters. And then there are business decisions that unfold in twenty-seven days.
Between February 22, 2024 and March 21, 2024, Reddit Inc. — a nineteen-year-old private company that had never turned a full-year profit — did three things in sequence that would restructure the economics of the open internet. On February 22, Google announced a partnership giving it access to Reddit’s content for AI training. Also on February 22, Reddit filed its S-1 with the SEC. On March 15, Reddit disclosed that the FTC had opened a non-public inquiry into its “sale, licensing, or sharing of user-generated content with third parties to train AI models.” On March 20, Reddit priced the IPO at $34 per share, at the top of the range. On March 21, Reddit began trading on the NYSE under the ticker RDDT.
Twenty-seven days. One partnership announcement, one S-1, one FTC inquiry disclosure, one IPO. In that order. Sonny reads sequences like this for a living. Sonny is not saying the sequence was orchestrated. Sonny is saying that a corporate calendar does not usually pack Google, the SEC, the FTC, and the NYSE into four consecutive weeks by accident.
What Google Bought
"Reddit plays a unique role on the open internet as a large platform with an incredible breadth of authentic, human conversations and experiences, and we're excited to partner to make it even easier for people to benefit from that useful information." — Rajan Patel, VP, Google (Feb 22, 2024)
Translated from executive to English, Google got two things. First, structured API access to Reddit’s real-time content for training AI models — the models that would power Gemini and AI Overviews. Second, display rights — permission to build “more content-forward” surfaces showing Reddit posts inside Google Search.
Reddit got two things. First, money — approximately $60 million annualized, per Bloomberg. Second, Vertex AI — Google’s cloud AI platform — to power Reddit’s own internal search, the same search Reddit would later position as a “true search destination” competitive with Google.
Google paid Reddit sixty million dollars a year. Part of what Google paid for was the cloud infrastructure that would eventually let Reddit build a search engine to compete with Google. This was not, on either side, disclosed as the arrangement. It was, on both sides, the arrangement.
What Nobody Bought
Nowhere in the Google announcement, the Reddit S-1, or any subsequent public filing does the phrase “user compensation” appear. Nowhere does Reddit acknowledge that the unpaid volunteer moderators — whom Reddit’s own S-1 lists as a material risk factor — would receive any share of the sale.
Approximately eight percent of IPO shares were reserved for “eligible” users and moderators to buy at the IPO price. Not to receive. To buy.
The users got the offer to buy in. The users did not get paid.
Steve Huffman’s 2023 total compensation was approximately $193 million. Base salary: $341,346. Cash bonus: $792,000. The rest — approximately $192 million — was equity. The equity vested on a schedule tied to Reddit’s public trading price. The public trading price required the IPO. The IPO required a growth story. The growth story required the Google deal. The Google deal required content the moderators had written for free.
Sonny does not need to draw the arrow. Sonny has already drawn it. Sonny is invoicing.
The FTC Letter
"On March 14, 2024, we received a letter from the FTC's staff notifying us that the FTC's staff is conducting a non-public inquiry focused on our sale, licensing, or sharing of user-generated content with third parties to train AI models." — Reddit Inc., FWP filed with SEC, March 15, 2024
The letter was received on March 14. The disclosure was filed on March 15. The IPO priced on March 20. Reddit had approximately one hundred and forty-four hours to explain to prospective investors that the primary asset it had just monetized was under active FTC inquiry.
Reddit: “We do not believe that we have engaged in any unfair or deceptive trade practice.” As of August 2026, no formal action has been brought. Sonny would like to note that “non-public inquiry” is what the FTC calls the phase before it decides.
In their defense: this wasn't unprecedented
The Google–Reddit deal is not without precedent. Google has paid for content access before — news licensing deals with publishers, data partnerships with Getty. What’s different here is the timeline compression and the exclusivity. In most prior deals, the platform being paid didn’t also lock out every other buyer within the same fiscal year. That’s the new pattern: the platform Google is paying is also the platform Google is boosting — and the platforms being replaced are the ones who couldn’t afford the door fee.
Sonny is not saying Google’s payment caused Reddit’s ranking boost. Sonny is saying that the timeline places a $60 million payment and a 1,328% visibility surge within the same fiscal year. This is not a coincidence one can allege with confidence — but it is a coincidence one can name.
The naming is Act II.
ACT II — THE BLOCKADE AND THE BOOM
May – December 2024 · "This is not at all related to our recent partnership with Google."
May 10, 2024: The Warning Shot
Fifty-eight days after ringing the opening bell, Reddit posted “Introducing Reddit’s Public Content Policy.” The bad actors were “organizations, researchers, and other entities” using Reddit’s data “in ways they shouldn’t.”
Reddit did not name the bad actors. Reddit did not need to. Reddit had, two months earlier, taken $60 million from one of them. The bad actors were, by process of elimination, everyone Reddit had not yet been paid by.
June 25, 2024: The Drawbridge
"…if you are using an automated agent to access Reddit, you need to abide by our terms and policies, and you need to talk to us. We believe in the open internet, but we do not believe in the misuse of public content." — Ben Lee, Chief Legal Officer, Reddit (June 25, 2024)
Parse that sentence, because Sonny has been paid to parse sentences like it for twenty-five years. “We believe in the open internet.” That is the first clause. It has the shape of a principle. It is, in fact, a preamble to the operative clause: “but we do not believe in the misuse of public content.” Misuse is what you do when you have not talked to Reddit. Talking to Reddit means writing a check. Reddit had, at that moment, one check arriving. The check was signed by Google.
July 24, 2024: The Block Goes Public
404 Media noticed that recent Reddit posts had stopped appearing in Bing. DuckDuckGo. Mojeek. Qwant. Every major search engine — except Google, which had not.
Sonny would like to note that a monopoly which announces itself is called a merger. A monopoly which does not announce itself is called something the FTC used to have opinions about.
The Rathschmidt Denial
"This is not at all related to our recent partnership with Google. It is not accurate to say recent Reddit results are not coming up in non-Google search engines because of our recent deal with Google." — Tim Rathschmidt, Reddit spokesperson, to The Verge (July 2024)
A masterpiece of the form. Both sentences deny causation. Neither sentence denies correlation. The willingness Reddit required was not a promise not to train AI. The willingness Reddit required was a promise to pay for it.
Colin Hayhurst and the Small-Engine Graveyard
"They're [Reddit] killing everything for search but Google." — Colin Hayhurst, CEO, Mojeek
The list of independent search engines Reddit’s block hobbled: Mojeek, Kagi, Marginalia, Stract, Yep, You.com, Andi, Perplexity’s index, Startpage, Ecosia, Presearch. Reddit has, apparently, one customer. That customer is Google.
The Hidden Gems Problem
The most explosive claim: Google paid Reddit $60 million and boosted Reddit’s rankings. This claim is not established by the evidence.
Google’s “Hidden Gems” algorithm was deployed November 15, 2023 — three months before the paid deal. The 1,328% surge began in fall 2023. Reddit’s visibility explosion pre-dated the check.
Sonny is not going to allege that Google’s $60 million bought preferential ranking. Sonny is going to allege something worse.
The $60 million bought the exclusivity. The rankings were free. The exclusivity — the guarantee that no competing search engine would ever match Google’s view of Reddit — that was what the check was for. Google did not buy Reddit’s boost. Google bought the moat around Reddit’s boost. The moat is the product.
The 1,328% Boom
Reddit’s Sistrix top-domains ranking climbed from #85 to #7. Ahrefs estimated organic traffic grew from 57 million to 427 million monthly visits. Reddit became the second most visible U.S. domain in Google search, behind only Wikipedia.
The HouseFresh Massacre
HouseFresh lost 91% of its Google traffic. Daily visits dropped from 4,000 to 200.
"Google doesn't owe us anything. We don't simply deserve to get search traffic because we exist or because we say we should." — Gisele Navarro, HouseFresh (February 2024)
This is the corporate equivalent of a bystander at a bank robbery explaining, calmly, that the bank was under no obligation to remain solvent. HouseFresh survived. Most did not.
In their defense: Danny Sullivan has a point
Google’s Search Liaison Danny Sullivan’s position: searchers want forum results. Google is giving them what they want. Google is a democracy, responding to demonstrated user preference for community-sourced answers over corporate SEO content farms.
Sonny will grant Sullivan that point. Then Sonny will ask: if Google was surfacing Reddit for free before Reddit paid anything — what did the $60 million buy? The algorithmic boost didn’t need buying. The exclusivity did. Sullivan will never say this. Sullivan is not paid to.
The Data-Licensing Stack
Reddit is defending its users from unpaid AI scraping by selling the same data for money the users will never see. Sonny has seen this play before. The play is called fiduciary breach dressed as consumer protection.
August 11, 2025: The Wayback Machine Cut-Off
The Wayback Machine is the internet’s memory. It is run by approximately 200 people on a budget smaller than Steve Huffman’s 2023 stock grant.
Reddit restricted it to homepage-only access. No posts. No comments. No profiles.
"Internet Archive provides a service to the open web, but we've been made aware of instances where AI companies violate platform policies, including ours, and scrape data from the Wayback Machine." — Tim Rathschmidt (August 2025)
This is what Sonny calls displacement enforcement. You cannot punish the party you are complicit with. You can, however, punish the party whose function is to make you accountable.
The Blockade, In Summary
In fifteen months, Reddit: (1) Blocked every major search engine except its paying customer. (2) Blocked every independent search engine from indexing recent content. (3) Blocked the Internet Archive from preserving the historical record. (4) Sold its users’ data to two AI companies for approximately $130 million annually. (5) Distributed $0 to the users. (6) Framed all of the above as user protection.
The blockade worked. The boom happened. Reddit’s valuation crossed $30 billion. The users kept typing. The small sites kept dying. Google kept paying. The fortress is Act III.
ACT III — THE FRANKENSTEIN
2025 – 2026 · "Reddit is one of the few platforms positioned to become a true search destination."
The Search Engine That Google Paid For
In February 2024, Google gave Reddit $60 million a year and access to Vertex AI. On July 31, 2025, Huffman wrote:
"Reddit is one of the few platforms positioned to become a true search destination." — Steve Huffman, Q2 2025 Shareholder Letter
The man who sold Google his users’ content was now using the proceeds — and Google’s own cloud — to build a search engine. Sonny has the receipts, your honor. 🐊
Reddit Answers
Reddit Answers launched Q1 2025 — built on OpenAI’s models, not Google’s Gemini. Google paid for the Vertex AI infrastructure. OpenAI’s models power the actual product. Task failed successfully.
Suffering from success — except the suffering was everyone else’s.
By Q2 2026: 514.6 million weekly active users. Shares fell 12% on “choppy search referrals.” Google’s AI Overviews were eating into Reddit’s traffic — using Reddit’s content (paid for at $60M/yr) to answer questions directly, preventing users from clicking through. Google paid to build a system that cannibalized the partner it was paying. You love to see it. 🤡
The Lawsuits Nobody Expected
Suing Anthropic for scraping while selling the same data to Google is not hypocrisy. Hypocrisy requires shame. This is business model design. The distinction matters in court.
The Prequel Everyone Forgot
In April 2023, Reddit announced new API pricing. Christian Selig (Apollo) calculated his bill at $20 million/year. Apollo shut down June 30. Along with it: Reddit is Fun, Sync, BaconReader, Relay, Narwhal.
💀 7,000+ subreddits went dark in protest.
Huffman compared moderators to “landed gentry.” Same week, he praised Elon Musk’s approach to cost-cutting at Twitter. An internal memo: “This will pass as well.”
It passed. The users kept typing. Nine months later, Reddit sold it.
The Deal That Might Not Renew
By mid-2026, the deal was approaching expiration. Quartz and CNBC reported renewal uncertain. Reddit’s stock dropped ~9%.
If the deal renews, Google funds Reddit’s search ambitions while Reddit reduces its need for Google. If it lapses, Reddit loses $60M annually. Both outcomes are bad for someone. Both outcomes are, in Sonny’s professional assessment, hilarious.
They dug the moat, sold the water, and forgot they were standing in it.
The Final Accounting
In their defense: the product is real
Reddit is not a scam. The content is real. The communities are real. The 514 million weekly users are real. The Google deal was, on paper, a normal commercial transaction. The robots.txt is Reddit’s right to configure. Nothing Reddit did was, as far as current litigation shows, illegal.
But legal and fair are two different invoices. Reddit built its value on unpaid labor, sold that labor for $130 million a year, paid the laborers nothing, blocked everyone except the buyer, framed the blocking as protection, and went public on the proceeds. Every step was legal. The total was something else.
P.S. Steve — congratulations on the $30 billion market cap, and Sonny means that the way attorneys mean congratulations, which is to say: the compliment is real and the invoice is attached. Your users built every word of the platform you just sold. Your moderators curated every community you just monetized. Your IPO prospectus lists their unpaid labor as a material risk factor, which means your own lawyers agree they could leave. They haven’t left yet. They’re still typing. The question is not whether they’ll notice the $193 million. The question is what happens when they do. Sonny does not send flowers. Sonny sends receipts. 🐊