It is very hard for me to understand how Google and Facebook manage to make that much money. Because even if Reddit made 10x at 1 billion, it is still so far off from the other two.
First, Reddit (up until the recent redesign) functions as a community service. Reddit’s unprofitable nature is akin to other public service websites like Wikipedia. If you design a system simply to cover the costs of hosting fees and maintenance to provide the public with a great service, it shouldn’t be surprising to have great reach without making money. There are probably many useful website ideas that would only work unless funded by the government or donations.
Second, it provides a place for discussion, and its anonymous threaded, commenting system promotes a structured and unfiltered, often viscous view of reality that scares marketing departments.
If anything I believe that what Reddit has shown us is that there's absolutely no money in online advertising, for most sites. You'd have to built your site around the advertisers, and not the users, if you want to make money going down that route.
The idea that you can built a service and just slap ads on it when you reach a certain number of users only work in rare cases.
Facebook is fantastic for advertisers what it mastered is targeting. It knows EVERYTHING about you. However it is at a disadvantage from google in that, you're not in a buying mindset when you're on the site. So as an advertiser the clicks are worth less.
Reddit could enter facebooks space. Your comments and forum activity could be data mined to build an advertising profile. However, they haven't really mastered that yet.
The #1 post on https://www.reddit.com/ right now is an post about a Marvel movie.
#2 is World Cup, surely monetizable.
#4 is a video game
Reddit seemed to follow the path of traditional media such as newspapers for a long time, thinking static ads were enough. Viral 'organic' marketing seems to be one of the most valuable services the platform offers, and other firms capitalize on this, but it's tricky for them to capitalize on this and maintain their credibility.
Obviously that's not how it works in reality, so I argue something else is at work than just targetting.
Here[1] is an attempt at an approximation in 2014, but I doubt it's accurate since it extrapolates the number of servers they run from 2012, how much it costs to run them, and doesn't consider (usually the biggest cost) employee wages and other things like rent.
[1] https://www.quora.com/What-is-Reddits-income-from-daily-Redd...
That was their revenue.
If I made a business that gives you a dollar when you send us fifty cents, I could probably be super popular until I run out of VC funding.
* Not counting mobile