| Hi everyone, it's Aisha in San Francisco. Reddit had an impressive inaugural earnings report this week. Now what? But first... Three things you need to know today: • Chip designer Arm gave a lackluster forecast for annual revenue
• Google's DeepMind boss targets a $100 billion-a-year drug discovery business
• Apple's China iPhone shipments rose a surprising 12% in March Reddit Inc. blew past investor expectations for sales and users this week when it issued its first earnings report as a public company. But already the question is: What's next? Now that Reddit is public, investors will expect the 19-year-old social media company to keep growing every few months. To do so, the site will have to find new ways of making money besides just advertising while also attracting new users. Reddit gets about 98% of its money from advertising, but the industry can be volatile, going up when markets are high and down when they're low. Reddit has a few other ways of making money, like selling its data to artificial intelligence companies or charging users to offer goods on the site. But those businesses are pretty small and other social media companies have found that diversification is much easier said than done. Investors gave the stock a pop when Reddit said it was selling its content to AI businesses. So far, the company has made about $20 million from those deals, with agreements in place that will bring in more than $60 million by the end of the year. But that's just a drop in the bucket compared with the $804 million in annual revenue the company made last year. Reddit also has ambitions to build its own marketplace, which co-founder and Chief Executive Officer Steve Huffman calls the "user economy." "This is users making money from other users on Reddit," he told me in an interview before Tuesday's investors call. The company envisions Redditors selling collectibles such as avatars or charging subscription fees to read certain posts, with the company getting a small cut. Other social media companies have tried e-commerce, but they haven't always been successful. Pinterest Inc. and Meta Platform Inc.'s Instagram, for example, used to let people buy items directly from their sites, but then resorted to sending users over to Amazon instead. Facebook Marketplace, which Reddit considers a competitor to its commerce ambitions, has lots of users, but Meta's Facebook doesn't make any money directly from sales. Attempts at selling subscriptions have also faltered (Twitter Blue and Meta Verified come to mind). Snap Inc., which has more than 7 million subscribers, is probably the most successful, but the $330 million it makes from subscriptions still isn't a significant portion of the business. Reddit will also need to attract new users in a crowded social media field dominated by sites with addictive video content. Instagram, for instance, has more than 2 billion monthly users, TikTok has more than 1 billion, and Snap has 800 million. Reddit by comparison, has closer to 500 million, Huffman told investors this week. Reddit has plans to push more into video, but it's still primarily a text-based site. Reddit doesn't have as many international users as other platforms, which is actually in the company's favor. Only about 50% of Redditors come to the site from outside the US, Huffman told me. "If you look at other platforms, we should expect to be 80% to 90% non-US," he said. But there are hurdles to growing internationally: Virtually all of Reddit's written posts are in English, even though by some estimates only 1 in 5 people in the entire world speak the language. Reddit is in the process of translating its 1 billion posts into languages like French and Spanish, Huffman said, but it's still early. The other challenges facing Reddit are more existential in nature: Will people choose it over the latest AI chatbots such as ChatGPT? Can the site stay relevant for another two decades? Does human discussion have more value than AI-generated responses? Do people still want community? Huffman told investors the answer is yes: "In the AI era, people value authentic content more — content written by humans, and that's what Reddit is and that's what Reddit has."—Aisha Counts Apple Inc. Chief Executive Officer Tim Cook will step down eventually. Here are some of the potential successors to the iPhone maker's 63-year-old leader. The drop in demand for electric vehicles has shaken the industry. Apple's unionized workers at its Towson, Maryland, retail store plan to vote Saturday whether to authorize a strike. The Scattered Spider gang behind the MGM hack is targeting banks. | 
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