Tag: Growth Targets

Google Reader was useful right up until Google killed it.

That is what makes the shutdown worth remembering.

Reader did one ordinary job extremely well: it collected updates from RSS feeds and let people follow many websites from one place. It did not need to become a social network, a video platform, or an advertising empire to be useful.

Google’s reason was not that RSS stopped working

Google launched Reader in 2005. In March 2013, the company announced that it would retire the service on July 1.

The explanation was short. Google said Reader had a loyal following, but usage had declined. The company also said it was concentrating its energy on fewer products.

See Google’s 2013 spring-cleaning announcement.

Users were given time to export subscriptions and other data through Google Takeout. RSS itself survived. Competing readers existed and more appeared after the shutdown.

So this was not a case where the underlying technology became impossible to operate.

It was a portfolio decision.

Useful to whom?

A product can fail one corporate test while passing the user’s test every morning.

For the person following hundreds of blogs, research sites, newspapers, or niche forums, Reader could save substantial time. For Google, a service with declining usage competed internally for engineering attention with products capable of reaching vastly larger audiences or producing more strategic value.

Both statements can be true at once:

Reader was useful.

Reader was not useful enough to Google.

That distinction gets lost whenever a shutdown is treated as proof that nobody wanted the product.

Corporate scale changes the definition of success

A small independent company may consider a stable service with a dedicated paying audience perfectly healthy.

A giant platform company may evaluate the same audience against opportunities measured in hundreds of millions or billions of users.

That creates a strange risk for customers. A product can be popular enough to become part of their routine and still be too small to survive inside the company that owns it.

The relevant question before depending on a free or subsidized service is therefore not only is this good?

It is also what would make this worth continuing for the operator?

Those are different questions. Google Reader answered the first one for years.

A platform can run out of new humans before it runs out of revenue targets.

That is when revenue per user becomes interesting.

Public companies routinely measure how effectively an existing audience is being monetized. The metric is not sinister. It is useful accounting.

It also creates a very clear incentive:

If the audience is already large, growth can come from earning more from each person already there.

Reddit says this part out loud because investors need the numbers

Reddit defines average revenue per unique, or ARPU, as quarterly revenue divided by average daily active uniques in a geography. In its 2025 annual report, Reddit described multiple levers for expanding monetization and ARPU, including advertising products, advertiser growth, and other revenue opportunities. See Reddit’s 2025 Form 10-K.

The numbers moved substantially.

For the fourth quarter of 2025, Reddit reported global ARPU of $5.98, up 42% from $4.21 a year earlier. Daily active uniques rose 19% over the same period. See Reddit’s Q4 and full-year 2025 results.

That is not evidence that Reddit became worse.

It is evidence that the company became much better at producing revenue from the audience.

Those are different claims.

Monetization pressure can translate into product pressure

A platform trying to increase revenue per user has several obvious options:

show more advertising inventory,
improve ad targeting or pricing,
add premium subscriptions,
move features into paid tiers,
sell promoted placement,
license data or content,
charge businesses for tools,
increase marketplace commissions.

Some of those changes can improve the product.

A successful subscription may fund better moderation or infrastructure. Better ad tools can reduce irrelevant advertising. Business products can subsidize free users.

The problem appears when the revenue objective begins consuming more user value than the platform creates in return.

The metric does not prove the motive of every feature

This is where Enshittification analysis needs discipline.

If a company reports rising ARPU and later adds a disliked feature, that does not automatically prove the feature was ordered by investors to squeeze users.

Stronger evidence comes from investor materials that explicitly connect monetization goals to product strategy, followed by documented changes in pricing, ad inventory, fees, or paid access.

Reddit’s filings are useful because the company itself discusses monetization and ARPU as strategic objectives.

The larger mechanism is not unique to Reddit.

A platform’s early question is often:

How do we get everybody here?

Once the answer is sufficiently successful, the financial question naturally becomes:

How much can this audience produce?

That second question is where the user’s experience and the investor’s spreadsheet begin sharing the same screen.