Comment on September 2025: Updates for the .worlds and call for donations
NateNate60@lemmy.world 1 day agoThe “cost of revenue” is the figure that I am using. In business, cost of revenue is defined as the costs incurred directly to deliver the product to the customer, which is basically just hosting fees.
Thus I believe 10^7^ USD is correct.
So the difference is about one order of magnitude, which is still not insignificant.
Although, it would not surprise me if Reddit makes up most of that order of magnitude in terms of economy of scale, since at some point you would just rent some warehouses and run your own server farms, or at least negotiate better hosting rates if you’re spending millions on hosting every month.
squaresinger@lemmy.world 1 day ago
Cost of revenue is $45.9 Million per quarter, so ~$15.3 per month. That’s even less than the administrative cost. And again, this certainly includes the salary for everyone working on hosting, and that’s going to be much, much less than the pure cost of hosting.
NateNate60@lemmy.world 1 day ago
15.3 million is the same order of magnitude as 10^7^. I don’t see what the issue is with saying the cost of hosting is “on the order of 10^7^” here, unless you somehow think they are spending US$5 million a year on salaries of people who are directly involved in the provision of the product to the users? That would be US$60 million a year or enough to pay 600 people a six-figure salary, which I guarantee their employees are not all so well-paid.
squaresinger@lemmy.world 1 day ago
Include the salary for admin and mods in the figure for lemmy and we are not at 10^3 for Lemmy either. The figure for lemmy includes only the pure hosting cost, while the figure for Reddit involves a ton more.
Reddit has 2233 full-time employees. If only half of them are working on the product, and you take $60mio a year as the budget, that would be $53700 per year and would include taxes, benefits and all that. Doesn’t strike me as an unrealistic salary, for people like admins, mods, support, devops, provisioning and all that.
Remember, we don’t have “hosting costs” as a figure for Reddit. We have “Cost of revenue” and that includes anything that goes into running the site.
NateNate60@lemmy.world 1 day ago
Based on the fact that four times as much was spent on R&D, and almost three times as much was spent on sales and marketing, and even administration spent 50% more, I’m pretty confident that most employees are not working on the product itself.
Your bringing up admin salaries is a perfect example of economies of scale. You can easily mind a 1,000,000-user community with ten or twenty moderators. But 10,000 users still need at least two or three people minding them. Anecdotally, smaller online public groups seem to have more troublemakers per capita, to an extent.